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How does gap insurance work after a car is stolen?
I just purchased a 2022 Kia Soul and I decided to get the gap insurance my seller recommended. I’m curious how this covers me, though. Like how exactly does gap insurance work after a car is stolen?
Shannon Fitzgerald · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations on the new
Kia Soul
—you’ve got yourself a truly iconic crossover SUV! It’s a very good idea that you purchased gap insurance
, as well. Here’s how gap insurance works after a car is stolen: - You report your stolen vehicle to your insurer (and the police)
- After a month or so, your vehicle is unable to be recovered and is deemed a total loss
- Comprehensive coveragepays you the market value of the vehicle—but due to depreciation, this is 30% less than what you still owe in loans
- Gap insurance bridges that 30% to ensure you’re not paying loans on a vehicle you aren’t in possession of
It’s as easy as that!
Essentially, gap insurance—or guaranteed asset protection—protects you against your vehicle’s depreciation. Since insurers will only pay out the market value of a vehicle in a total loss scenario, you will be out several thousands of dollars without gap insurance stepping in to cover the difference.
This is important coverage to have as long as you still owe more on your car than your vehicle’s market value is worth. Once that changes, you can then
cancel your gap insurance
and get a refund on the unused premiums. Keeping yourself armed with gap insurance can be a huge financial help should your car get stolen or totaled. With
Jerry
, you can make sure you’re getting your coverage for the best price, too. The app is free to use and instantly analyzes custom quotes from over 50 top insurance companies to track down the lowest rates available. The average user ends up saving $887 a year on
car insurance
, so it’s definitely worth a look to keep that brand new Kia Soul well-protected! View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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