1. What is Gap Insurance?

Gap insurance covers the difference between what you owe on your vehicle and its actual cash value in case of total loss. It's particularly important for new vehicles that depreciate quickly.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Gap\ Amount \) — The coverage amount needed (USD)
• \( Rate \) — Insurance rate percentage (%)

Explanation: The premium is calculated by multiplying the gap amount by the insurance rate percentage.

3. Importance of Gap Insurance in Florida

Details: In Florida, gap insurance is particularly valuable due to the state's high vehicle depreciation rates and frequent total loss scenarios from weather events and accidents.

4. Using the Calculator

Tips: Enter the gap amount in USD and the insurance rate as a percentage. Both values must be positive numbers to calculate the premium.

5. Frequently Asked Questions (FAQ)

Q1: Who needs gap insurance in Florida?
A: Florida drivers who owe more on their vehicle than its current value, especially those with new cars, long loan terms, or small down payments.

Q2: What is a typical gap insurance rate in Florida?
A: Rates typically range from 1-3% of the gap amount, depending on the insurer and vehicle type.

Q3: When is gap insurance most beneficial?
A: During the first 2-3 years of vehicle ownership when depreciation is highest, or after major accidents that significantly reduce vehicle value.

Q4: Does Florida law require gap insurance?
A: No, gap insurance is optional in Florida, but many lenders require it for financed vehicles.

Q5: Can I cancel gap insurance?
A: Yes, you can typically cancel gap insurance and receive a prorated refund once your loan balance is less than the vehicle's value.