GAP Insurance

We know that comprehensive insurance protects from many cases which can happen to the car. However MOD insurance doesn’t protect from plunder and theft.

Not everybody knows about such innovations in the market of insurance as GAP insurance. In fact, it covers a difference between current and initial cost of the car. Any car, leaving an automobile sales center starts receiving natural depreciation wear which makes about 15 percent per year in case of more or less normal use of the car. Based on this depreciation the cost of your insurance approximately increases by the same percent. And, the GAP insurance allows reducing this value.

As a result, it is becomes profitable to combine MOD insurance and GAP insurance. It is especially noticeable when we have complete destruction of the car as result of any accident. And at that, the car was bought on credit. The sum which will be paid by an insurance company taking into account the depreciation, won’t be enough for loan repayment at the  bank, and you should empty your pockets. Here the addition of this difference will be at the right moment.

In the West the car which is in the credit loses the cost three times faster. It was necessary to find a solution which would satisfy three parties (bank, client, insurance company). Such practice was included into regulation from eightieth years and still works.

In the countries such as Russia and Ukraine, such type didn’t gain strong extension as credit was usually paid long before the car lost its cost. However now with entering into the market enough expensive cars, the tendency has changed and such type of insurance becomes popular. Currently, such insurance can be received only upon purchase of the car.

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