Yes, you can normally cancel gap insurance if you no longer need it. If you cancel your gap insurance, you will get a refund according to the length of time of your insurance policy.
If you are financing a new car, lenders will require to have full insurance coverage (collision + comprehensive). If your car is totaled or stolen, your full insurance policy will cover only the value of the car at the time it was damaged/stolen.
Gap insurance is an add-on to your full coverage. This insurance will protect you when you owe more on your lender than what your car is worth.
Learn how Gap Insurance works and determine if it's a good option for you.
If you bought a new car for $30,000 and you still owe $25,000 on your lender, your full coverage insurance policy will pay the depreciated value of the car (let's say $22,000).
Without gap insurance, you will still need to pay $3,000 out-of-pocket. If you have the gap insurance policy as an add-on to your full coverage, your insurance company will pay the remaining $3,000.
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Gap insurance is very affordable insurance coverage, but you will need to buy comprehension and collision coverage first. If you think that at some point, you will owe more than the value of the car, it's a good idea to get gap insurance.
You should consider gap insurance when:
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