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	<title>New answer on: What Does Gap Auto Insurance Cover?</title>

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		<title>By: Mark Bartlett CLCS</title>

		<link>https://insurancelibrary.com/auto-insurance/what-does-gap-auto-insurance-cover</link>

		<dc:creator>Mark Bartlett CLCS</dc:creator>

		<pubDate>Wed, 05 Jun 2013 15:36:24 +0000</pubDate>

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		<description><![CDATA[On an auto insurance policy gap coverage covers the gap between the cars ACV or Actual Cash Value vs. the loan value of a vehicle. This is a coverage that is purchased when a car is less then a year old and is available on most auto insurance polices for 2 to 3 years and then falls off. An example would be you purchase a brand new car for $20,000 and you take out a loan for $18,000. Within a year you total the car. The market value or actual cash value of the car at the time of the accident is $16,500 due to quick depreciation. However due to the size of loan and interest rates keeping your principle up you may own $17,500 at the time of the accident. This makes a $1,000 gap the insurance company is not obligated to pay. Gap insurance would fill this gap so your loan is completely paid off and your not backwards. I recommend you have this discussion with your local agent when purchasing a new vehicle.]]></description>

		

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