Auto insurance that pays for damage to your vehicle from non-collision events such as theft, vandalism, fire, hail, flooding, falling objects, and animal strikes. Like collision, it is optional but typically required by lenders.
Related Terms
Deductible
The amount you must pay out of pocket before your insurance coverage kicks in. A higher deductible generally means a lower premium. For example, if you have a $1,000 deductible and file a $5,000 claim, you pay $1,000 and your insurer pays $4,000.
Collision Coverage
Auto insurance that pays for damage to your own vehicle when it collides with another vehicle or object, regardless of fault. Collision coverage is optional but often required by lenders if you have a car loan or lease.
Gap Insurance
Coverage that pays the difference between what you owe on a car loan or lease and the vehicle's actual cash value if it is totaled or stolen. Without gap insurance, you could owe thousands of dollars to your lender after an insurance payout.