What Is Loan or Lease Gap Coverage?

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A white umbrella logo and text on a red background. What is loan or lease gap coverage? A person types the phrase into a search bar and clicks the Search button. 
 
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Loan or lease gap coverage. You might have heard of it, but what is it? 
 
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An animated car in a frame. 
 
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Picture this, you pick out a new car and finance it with a loan. 
 
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A woman. 
 
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One day when you're driving to work, you get into an accident and the car is totaled. 
 
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A red car rear ends a gray car, smashing the front of the car. A document. 
 
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Generally, loan or lease gap coverage can help cover the difference between the actual cash value of your vehicle at the time of the accident and the unpaid balance of your loan or lease. 
 
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A stack of dollars. A scale. A dollar sign with dotted lines pointing to a car. 
 
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That's where the gap part comes in. 
Here's a quick illustration. Suppose that at the time of the accident your car loan balance is $20,000, and the actual cash value of your car is $17,000. 
 
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The car drives. A check mark in a shield. A hand gives a dollar to another. 
 
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Loan or lease gap coverage may protect you from having to pay the remaining $3,000 balance of your loan, subject to certain exclusions. 
 
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A hand writes a document. 
 
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For more information, go to travelers.com. 
 
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Travelers red umbrella logo. Text, The information in this video is general in nature. Any description of coverage is necessarily simplified. Whether a particular loss is covered depends on the specific facts and the provisions, exclusions, and limits of the actual policy. Nothing in this video alters the terms or conditions of any of our policies. You should read the policy for a complete description of coverage. Coverage options, limits discounts and deductibles are subject to state availability and to individuals meeting our underwriting criteria. Not all features available in all states. Insurance is underwritten by The Travelers Indemnity Company and its property causality affiliates, One Tower Square, Hartford CT. In TX, Automobile insurance is offered by Travelers Texas MGA, Inc. and underwritten by Consumer County Mutual Company (CCM). CCM is not a Travelers Company. In CA: Auto Insurance is underwritten by Travelers Commercial Insurance Company, Certificate of Authority #6519; State of Domicile: CT and Travelers Property Casualty Insurance Company, Certificate of Authority #6521; State of Domicile: CT. In WA: Automobile Insurance is underwritten by The Standard Fire Insurance Company. Underwriting companies in CA and WA are located at One Tower Square, Hartford, CT 06183. Connecticut. Copyright 2022 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademark of The Indemnity Company in the U.S and other countries.