Gap exposure, in plain English
What happens when your loan balance is larger than your vehicle's settlement value.
Where gap shows up
Gap exposure appears most often in the first few years of a loan, when balances are highest and depreciation is steepest. Even a well-maintained vehicle can be worth less than what is owed on it.
How gap coverage is described
Some auto policies describe gap coverage as an optional add-on, while others reference it through a lender-provided product. The exact language varies; the goal of this explainer is to help you locate the relevant section in your own paperwork.
Questions worth asking your existing carrier
We do not provide quotes or recommendations. We do, however, encourage drivers to ask their existing carrier or lender for the exact terms that apply to their account, including how a difference between settlement and loan balance would be handled.
