What is motorcycle GAP insurance? How is it different from regular insurance?
GAP is an acronym that stands for “guaranteed asset protection.” It’s an additional policy that covers the difference between the balance of your loan and the value of the bike itself in the event of a total loss. If your motorcycle is stolen or totaled in an accident, there may be an amount of money that your regular insurance won’t cover. Let’s look at a quick overview of motorcycle GAP insurance as you decide whether or not to go for that extra protection.
What Does It Do?
GAP insurance offers you more coverage on your motorcycle when you add it onto a traditional policy. GAP insurance goes beyond the basics of motorcycle insurance. Motorcycles, cars, and other motor vehicles depreciate in value starting the minute you drive them off the lot. But if you took out a $10,000 loan to buy a bike with zero money down, you’re on the hook for that whole amount. Even if the bike is only worth $8,000 a few months later, you’ve got to pay off the whole loan. So if you total your bike or if it’s stolen, you’re stuck paying the remaining $2,000 on your loan. That’s where GAP insurance comes in—it’ll take care of that extra two grand for you.
Do I Need It?
Anyone looking for insurance for motorcycles in California should consider GAP insurance, especially if any of the following apply:
- They bought the bike new
- The bike they chose is known for rapid depreciation
- They owe more on their loan than the bike is worth
- They purchased the bike with zero money down
- The finance period is more than 48 months
However, if you paid a large sum of money up front for your motorcycle, GAP insurance will not be cost effective.
Is It Worth the Cost?
That depends on your financial situation. If you owe a great deal on your motorcycle loan—or simply get lots of use out of the bike—GAP insurance could save your wallet. Think about the worst-case scenario: your bike is stolen or smashed to pieces. Do you have the spare cash to cover the whole gap right away? GAP insurance is a small amount per month to pay on top of your regular insurance, and smaller payments over several months are budget friendlier than a surprise lump sum. A GAP insurance policy could save you from having to pay that extra $2,000 if your bike is stolen or totaled.
Now that you know what a GAP policy is all about, use this quick overview of motorcycle GAP insurance to inform your conversation with your insurance provider. You might be interested in motorcycle gear and accessories coverage, too.
Saferoad Insurance is dedicated to ensuring that every driver in California is thoroughly covered. Contact us today for a quote!