Kia Gap Insurance: Everything You Need To Know
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While having some type of insurance coverage is typically required to buy or lease a vehicle from a Kia dealership, the minimum requirement can vary by state and individual dealership. Your personal insurance company may offer standard liability and comprehensive or collision coverage but pay less than the amount you owe on your loan if your vehicle is totaled in an accident or stolen and not recovered. This is where Kia GAP insurance can be important since you are responsible for the “gap” in coverage, which might be rather expensive.
GAP Insurance often is included automatically through a Kia-sponsored lease. If it’s a new or used Kia vehicle purchase for a few bucks a month, you may protect yourself against a significant financial loss in the case of forced termination, such as a thief or a destroyed car. GAP insurance is included in every lease through Kia Motors Finance.
GAP insurance is meant to be used in conjunction with collision coverage or comprehensive coverage. If you have a covered claim, your collision coverage or comprehensive coverage will help pay for your totaled or stolen vehicle up to its depreciated value. Coverage is important to avoid major loss in value due to immediate depreciation. And, most vehicles’ value depreciates about 20 percent in the first year of ownership alone.
Benefits of Kia GAP insurance
- Reduces the risk of unnecessary financial hardship and potential credit damage in the event of a total loss, giving you peace of mind
- In the event of a total loss or theft, the maximum claim benefit is $50,000
- Insurance deductibles of up to $1000 are waived.
- Protects your investment for up to 7 years, depending on the length of your loan
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Kia Gap Insurance alternate providers
Insurance companies can only offer so much coverage, and this may change based on factors like your age, location, driving history, and even the color of your car. Kia GAP coverage was created to “bridge the gap” between your insurance provider and out-of-pocket costs. Insurance companies only pay the real cash value of your car in the event of an accident; thus, the difference between the actual cash value and the amount is covered. Kia’s coverage may not be the cheapest, and there are local and nationwide providers that also offer a degree of GAP coverage. The big names are:
- Farmers
- Nationwide
- Progressive
- Safeco
- State Farm
- Travelers
- AAA
- Allstate
- American Family
- Esurance
- Farmers
What else is covered by Kia GAP Insurance?
Guaranteed Asset Protection (GAP) policy will cover the shortfall in coverage from your provider, as well as cover your insurance deductible up to $1000. While Kia GAP insurance covers the cost of repairs when they are required, it does not cover personal injuries, mechanical problems, or your deductible. Kia GAP insurance is designed to protect drivers during unforeseen events and to constantly keep the condition of a vehicle as protected as possible by providing excellent coverage to drivers who suffer any of the following:
- Theft
- Fire
- Vandalism
- Accidents
- Natural disasters or “Acts of God” like tornados, hurricanes, and floods
Specific coverage details from Kia GAP
- Losses up to $50,000 are covered
- Includes up to $1000 in coverage for your primary insurance deductible
- The cost of optional GAP coverage can be factored into your financing agreement
- Loans with terms of up to 84 months are available for coverage
- You can cancel and eliminate the coverage within 60 days of purchase for a full refund. After 60 days, a prorated refund on your monthly payment
- Covers loan balances that may not be accounted for by insurance companies, such as equipment add-ons or rollover from a trade-in
Kia GAP insurance covers the difference between the insurer’s total loss payout offer and the invoice purchase price after any discounts for up to 36 months or 3-year financing agreements. Only new purchases or leases are exempt from paying road tax and delivery fees with GAP coverage. In the event of a long-term loan or finance plan, Kia GAP Insurance covers the gap between the insurer’s total loss settlement offer and the amount due on your loan agreement for up to 60 months of payment plans or a standard 5-year financing plan.
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Kia Exclusions to coverage may apply
Kia GAP insurance does have several listed exclusions in their agreements that would nullify any additional GAP coverage and most likely result in significant out-of-pocket costs from the primary driver. If there is a total loss resulting from the primary driver’s dishonest, fraudulent, or illegal acts (such as DUI), or those committed by a purchaser’s family member or other person acting under the main owner’s authority are void. Any vehicles used for competitive driving, racing, or a prohibited commercial purpose may be subject to coverage exclusions and limitations, and additional exclusions may apply that would nullify Kia’s protection depending on the dealership.
The provisions of the addendum govern all transactions involving the optional Guaranteed Asset Protection (GAP) product. Past due payments on your loan or finance plan, any additional cost of your primary insurance deductible that exceeds $1000, and delayed insurance payouts are all excluded from Kia’s GAP protection. Terms, conditions, and specific coverage details, including limitations and exclusions, are detailed in the GAP Deficiency Waiver Addendum may vary by state-to-state coverage.
For any vehicle, GAP coverage is strongly recommended for customers who:
- Make a down payment of less than 20% of the purchase price
- Transfer negative equity from an old car loan to a new one
- Finance for at least 72 months
- Finance a car with a high depreciation rate (specific Kia models)
- Leased cars
If it sounds like a lot to know, you’re not alone. But when in doubt, Kia’s GAP insurance is a strong option to consider and worth a conversation at the dealership. Be sure you understand the coverage, but for a few extra dollars on a vehicle lease, extra protection isn’t a bad option. Always remember to do your research and compare options when considering any type of vehicle purchase, including coverage options.
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