Imagine this scenario: Your car has been totaled. Fortunately no one sustained serious injuries. Unfortunately the car that you purchased for $20,000 has depreciated to $15,000. You still have a pay off the financing for $20,000. How are you going to close the $5,000 gap?

Guaranteed Auto Protection (GAP) covers the amount between what your auto insurance pays — based on the retail value of your car — and the balance owed to the finance company. Using the example above, GAP insurance will pay the $5000 difference. GAP may also cover your deductible.

GAP supplements traditional auto insurance. It is applicable if your car is totaled for any reason, including theft, fire, accident, flood and vandalism. Gap insurance ranges from $250 to $600.

To be eligible for GAP insurance, you must have purchased or refinanced a car within a period of 90 days. However, eligibility requirements vary by state; some states do not allow gap insurance.

Gap insurance is available for all new vehicles. However used cars must have less than 100,000 miles and cannot be older than the current year plus nine model years. Gap insurance may be mandatory if you are leasing a car.

Each state sets different eligibility requirements for gap insurance. Some states do not allow this type of auto insurance. You may also be required to carry collision and comprehensive insurance. Check with your insurance agent to be sure you meet all the criteria for gap coverage.

Exchange Place matches you with qualifed providers of GAP and other auto insurance products in New York, New Jersey and the metropolitan area.