What Is Stop Gap Liability Insurance?
Stop gap insurance fills a financial risk where other insurance policies might fall short. For instance, in the case of workers’ compensation, gap insurance covers the missing liability coverage. When it comes to personal vehicles, gap insurance can help cover the costs that your normal insurance won’t.
Stop Gap in Workers’ Compensation Policies
When it comes to workers’ compensation policies, there are state mandated plans available. In some instances, however, these plans will not cover every liability or fully cover your employee. Gap insurance helps cover that gap that’s left by the mandated plan.
Stop Gap in Auto Insurance Policies
Sometimes called simply gap insurance, this policy pays the replacement value of a totaled car. This happens when the regular insurance payout is less than the lease payoff or loan. Often, a car will depreciate after you purchase it. If you’re in an accident before you pay off your car, you still have to pay off the loan. In this case, gap insurance pays out the difference so that you don’t lose money and can replace your car.
When it comes to your insurance policies, it’s important to make sure that you have full coverage. Some policies or coverage plans will not cover every risk or every event. Stop gap insurance helps cover other exposures.