Our last article looked under the hood of Physical Damage Truck insurance, which provides owners/operators of truck and trailer equipment with collision and comprehensive coverage. Collision coverage protects you in the event of a collision or overturn, while Comprehensive coverage protects you against most other physical damage losses. These losses could be caused by fire, theft, vandalism, or animal contact.
You can also add Gap coverage if you are financing or leasing your truck. It pays the difference between the actual cash value (ACV) of the truck and the current outstanding balance on your loan or lease. In fact, the lessor or lender will require you to purchase Physical Damage Truck insurance when financing your vehicle. You should also consider purchasing Gap coverage at the same time.
How Does Gap Coverage Work?
Let’s say you took a loan from the bank on a truck for $50,000. During the first year, you drove 80,000 miles. You were involved in an accident and had a total loss. Your insurance company determined that the truck was worth $35,000 at the time of the loss, but you were still responsible for the outstanding $40,000 on the loan. If you had Gap insurance, your coverage would have paid you the $35,000 value (less your deductible) and another $5,000 for the coverage gap.
It’s important to note that finance/lease Gap coverage does not cover carryover balances, lease penalties, late payments, and extended warranties. In addition, to be eligible for Gap coverage, you must be the original owner of the financed or leased vehicle, and the truck must be purchased from a new dealer rather than a previous owner.
About Western Truck Insurance Services
Western Truck Insurance Services is an insurance brokerage specializing in commercial truck insurance. We know this stuff and want to make sure you do too. Our clients appreciate our dedication to finding competitive rates and offering unparalleled service beyond excellent insurance options. They also value how our state-of-the-art automation provides lightning-fast truck insurance quotes, customer service, insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more.