Envision you recently got a brand new Harley Davidson Fat Boy motorcycle 2 weeks ago, and it was taken right in front of you as you were walking out of the grocery store. No worries, you are completely protected by taking out the motorcycle insurance policy your motorcycle financing lender mandated you to get with your new & used motorcycle loan. Correct?

Lots of times, not commonly if you study the fine points of the motorcycle insurance coverage you got. The reason is that most full coverage new motorcycle insurance policies will protect against full-blown loss like an unrecoverable stolen motorcycle, a crash that totaled the motorcycle or natural disaster, but these policies occasionally merely cover the going depreciated marketplace worth of the motorcycle not the unsettled amount owed on your cycle loan.

Thus, if you decided on a zero down payment new & used motorcycle loan or possibly a deferred payment private label credit card motorcycle loan, your Harley Davidson Fat Boy probably will have depreciated more quickly than you have paid down the value on your new motorcycle loan. The reason for this is your motorcycle insurance coverage most of the time simply covers the used marketplace value of your Harley Davidson Fat Boy which make you responsible for the difference in the value the insurance company pays you for your stolen or totaled motorcycle and what you truly owe on your new motorcycle loan.

In situations where a motorcycle is taken or completely totaled, motorcycle owners in the 1st fourteen months of a motorcycle loan are the most prone to not being reimbursed adequately from their motorcycle insurance coverage in order to cover the outstanding amount of their motorcycle loan. As a result, what is a cycle purchaser to do to shield against the unsettled value of their motorcycle loan?

The solution for a number of new motorcycle consumers lies within a somewhat known insurance coverage called Guaranteed Asset Protection insurance. Gap insurance policy is typically referred to as a total loss insurance coverage which will pay the difference of the total amount your motorcycle insurance company pay’s you for an aggregate loss on your cycle & the outstanding amount of your cycle loan.

For example here is an illustration. Let's say your Harley Davidson Fat Boy has a today market worth of $7500, yet you owe the financing company $9,500 in outstanding loan principal for your motorcycle loan. In situations that result in a complete loss such as a stolen motorcycle or even a totaled collision, your motorcycle insurance coverage will likely simply pay you the going depreciated marketplace value of $7500. This is unfortunate since, you still owe your motorcycle lender $9500 leaving you with a gap of $2,000 ($9500-$7500=$2000). Gap insurance guards you against the $2000 gap that you still owe to the credit company since the motorcycle insurance company only paid you $7500 for your stolen or fully totaled Harley Davidson Fat Boy.

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