Gap insurance is a lifesaver when your car is totaled or stolen, covering the 'gap' between what you owe on your loan and what your insurance pays out for the vehicle's actual cash value. But it's not a magic wand!
When *does gap insurance not pay*? Several situations can void your coverage. For example, if you're behind on your car payments when the incident occurs, your claim might be denied. Similarly, if the accident happened while you were driving under the influence or committing a crime, expect a rejection.
Furthermore, gap insurance typically only covers vehicle losses, not mechanical repairs or extended warranties. Check your policy carefully! Excessive negative equity rolled over from a previous loan might also exceed the coverage limit. Always read the fine print to understand the limitations and ensure you're truly protected against that financial gap.
