Florida car insurance normally covers the cash value of a vehicle as spelled out in your insurance policy. If you buy a new car, drive it off the lot and get into an accident, there could be a difference in the amount you owe on the loan and the amount of your car insurance settlement.

Why is this? Because cars lose value the moment you drive them away from the dealership. Your Florida car insurance doesn’t cover the amount of the loan you took out to buy the car, it covers the retail cash value of the vehicle. Some sources say a new car drops in value as much as 30% –just for driving it off the dealer lot.

That’s where GAP insurance comes in. With GAP insurance you are covered for the difference between the cash value of the car and the amount left outstanding on a new car loan or car lease.

Florida GAP insurance may be a wise choice if you want to protect yourself from paying the difference between what you owe and what the insurance company will pay. With GAP, be sure to ask the right questions of your insurance agent. Some GAP plans don’t cover cars below a certain value, and other restrictions may also apply.

All insurance companies are different, and every policy should be read from beginning to end before you decide what to pay for and what to pass up.

Should you pay the extra money? Before you can answer yes or no, a bit of research is in order. Who wants to pay for extras if they aren’t needed?

The most important thing when making a decision on your car insurance policy options is to know the limits of your existing coverage for towing and roadside assistance. Does the insurance policy offer better terms?

You may wish to cancel the coverage you have on a credit card or AAA if the car insurance policy offers you a better deal. The only way to know is to read the fine print on both the service and your insurance policy. Bottom line, don’t pay twice for the same service.