Understanding Gap Insurance in 2013

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Choosing the right kind of insurance for things like car, business, and home insurance, it can be a hard decision. While you don’t want to think a catastrophic event could occur, there is no way to know. Unexpected events occur every day and many of them require repairs that cost more than your traditional insurance policy. Luckily there is gap insurance that goes beyond what your other insurance policies are willing to cover.

What is Gap Insurance?

Gap insurance covers the “gap” between what you owe and what your other policies cover. Say for instance you get a gap insurance policy for your home. If there was a large event that caused damage to your home, such as a fire, flood, or natural disaster, your home insurance might only cover $100,000. If repairs cost more than $200,000 then you’re going to have to pay the additional $100,000 on your own. If you had gap insurance, you will get help covering this gap and avoiding these high costs from your own pocket. There are gap insurance policies for everything from homeowner’s and car insurance to different business insurance policies.

Do I need Gap Insurance?

The primary is question is whether or not it is a good investment to pay extra premiums for gap insurance. Some people are at higher risks and therefore need gap insurance more than others. For example, if your home has a high ticket price, includes a lot of valuables, or you own a business, you have higher risks and therefore should get a gap insurance policy. Also, if you live somewhere that gets a lot of natural disasters, such as living in the Midwest where tornadoes are common, you might also want to get this extra protection. Some people live in neighborhood prone to forest fires or hurricanes, you will also want to get a gap insurance policy to add to your other policies.

Choosing a Gap Insurance Policy

In 2013, it is going to be very important getting a gap insurance policy. This is because the insurance industry and premiums are going to change significantly. When you start looking for the right policy, be sure to read the fine print. You want to understand the rules and guidelines of the policy, including exactly what it covers, how much your premium is, and how much of a gap it is going to fill. Some policies cover $100,000 while others cover $1 million. Some gap insurance policies have exclusions while others are more open to nearly every type of theft or damage that could occur to your home, valuables, vehicle, or business property. Speak to an insurance agent to get help choosing the right type of gap insurance policy and get the right coverage.