Gap Insurance vs Waiver of Depreciation
What is Gap Insurance?
Gap Insurance is coverage that is typically offered by dealerships. It helps pay off the financing loan for your vehicle in the event that your insurance claim is considered a total loss. It can only be applied if there is a total loss and you owe more than the depreciated value as assessed by your insurance company. It will pay the difference between what is still owed and what the depreciated value is at the time of the loss.
What is a Waiver of Depreciation?
Waiver of Depreciation is an endorsement offered by insurance companies that provides coverage if your vehicle is considered a total loss. The coverage is primarily available for new vehicles at the time of purchase and is only available for a set time period (for example: 24 to 60 months depending on the company). Instead of paying the depreciated value of your vehicle at the time of loss, the company will pay out the lesser of:
- The purchase price on your bill of sale;
- The manufacturer’s suggested list price of the vehicle from the original date of purchase; or
- The cost of replacing the vehicle with a new one of the same make and model, with similar features.
Speak to us at Rhodes & Williams to learn more about how we can help you with your Waiver of Depreciation coverage. For more information contact Tommy Porteous at [email protected] or call 613-226-6590. Tommy is a RIBO licensed Ontario Insurance Broker and can guide you through the process.
This information is to be considered a guide only and does not represent every situation possible. You are strongly advised to speak with your broker to discuss your specific situation.