What You Need to Know about USAA Gap Insurance

If you’re financing a car, chances are you’ve heard of gap insurance. This type of insurance covers the difference between what you owe on a vehicle and its actual cash value in the event of a total loss. USAA, a popular provider of financial services for military members, offers its own version of gap insurance. Here’s what you need to know about USAA gap insurance.

What Is USAA Gap Insurance?

USAA gap insurance is an optional coverage that can be added to your existing auto insurance policy. It covers the “gap” between what you owe on your car loan and the actual cash value of your vehicle. This is important because in the event of a total loss, most insurance policies will only pay out the actual cash value of the car, which can be significantly less than what you still owe on your loan.

For example, let’s say you have a car loan of $20,000 and your car is totaled in an accident. The actual cash value of the car is determined to be $15,000. Without gap insurance, you would be responsible for paying the $5,000 difference out of pocket. With gap insurance, however, that $5,000 would be covered by your policy.

How Does USAA Gap Insurance Work?

USAA gap insurance is designed to provide coverage in the event of a total loss. If your car is stolen, vandalized, or damaged beyond repair in an accident, your gap insurance policy will kick in. It will cover the difference between what you owe on your car loan and the actual cash value of your vehicle, up to the limits of your policy.

It’s important to note that USAA gap insurance is not a standalone policy. It must be added onto an existing auto insurance policy with USAA. It’s also important to make sure you have comprehensive and collision coverage on your auto insurance policy in order to be eligible for gap insurance.

How Much Does USAA Gap Insurance Cost?

The cost of USAA gap insurance varies depending on a number of factors, including the make and model of your car, your driving history, and the amount of coverage you choose. On average, gap insurance can cost anywhere from $20 to $40 per year. This may seem like a small price to pay for the added protection it provides in the event of a total loss.

Is USAA Gap Insurance Worth It?

Deciding whether or not to purchase USAA gap insurance depends on a number of factors. It’s important to consider how much you owe on your car loan, the actual cash value of your vehicle, and whether or not you could afford to pay the difference out of pocket in the event of a total loss. If you can’t afford to cover the difference on your own, then gap insurance may be worth the added expense.

It’s also worth considering the reliability and financial stability of your car insurance provider. USAA has a strong reputation for providing exceptional service and support to military members and their families. If you already have USAA auto insurance, adding gap insurance is a natural choice.

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Conclusion

If you’re financing a car, gap insurance is definitely worth considering. USAA gap insurance offers an affordable way to protect yourself in the event of a total loss. Make sure to do your research and compare quotes from multiple providers to find the best deal for you.