Auto Insurance Endorsements

Gap Endorsement

Gap insurance pays the difference between the amount you owe on a loan or lease and an insurance check for a totaled or stolen car.

How does gap insurance work?

  • If you have collision and comprehensive insurance you can buy gap insurance.
  • If your car is stolen or totaled in an accident, you can make a claim on collision or comprehensive insurance (whichever applies).
  • You’ll receive an insurance check for the value of the vehicle, minus your deductible amount.
  • But even with the insurance money you could still owe money on a car loan or lease.
  • That’s when you’d make a gap insurance claim. The gap insurer will pay the difference between the vehicle value and the amount still owed.


Cars are often considered “totaled” when the repair cost is more than a certain percentage of the vehicle’s value. In many states a car is “totaled” when the repairs are greater than 75% of the car’s value at the time of the accident.

Is gap insurance worth it?

You may want gap insurance if:
  • You have a large balance on a car loan. For example, if you financed most or all of the vehicle price or have a long loan term, you may have a large loan balance. The average car loan is $30,234 and the average loan term is almost 69 months, according to a 2017 report by Experian.
  • You lease a vehicle and would owe a large amount if you totaled the car.
  • You have a car loan on a vehicle that depreciates relatively fast. The average new car depreciates by 49.6% in the first five years, according to


Websites such as EdmundsKelley Blue Book and NADAguides can help you estimate vehicle value. Your insurance company may use its own methods for determining value if you total a car.
You don’t need gap insurance if the balance of your car loan is less or close to the value of your vehicle.

OEM Endorsement

When you file a car insurance claim following an accident, the insurance company will give you a detailed repair estimate. One way carriers diminish losses is by not covering Original Equipment Manufacturer (OEM) parts.

Typically, OEM parts are exact replicas of the parts used when the manufacturer assembled your car, so they fit perfectly.

You can also buy used and aftermarket parts. Third-party companies, not an automobile’s original manufacturer, produce aftermarket parts. These parts are easier to produce at a high volume, but oftentimes they are manufactured to fit several makes and models of vehicles, not a single automobile.

Repair shops can use a variety of parts to get your vehicle back on the road. While most car owners might prefer parts produced by the original manufacturer, many standard auto insurance policies do not cover them. If you prefer OEM parts, you can add this endorsement to extend your coverage for an additional premium.


Did you Know?

We offer a wide variety of insurance products to include Home, Auto, Life, Annuities, Motorcycle, RV, ATV, Boat, Small Business, Rental, Umbrella, and Equine Mortality/Major Medical coverage.
Galvin Agency is here to help you with insurance questions, needs, and claims. We are here to assist you and our job is to make sure you feel protected and knowledgeable. Thank you for your business and we look forward to talking with you soon!

No person associated with this news letter receives any form of compensation for any products mentioned, nor should any mention of a particular product be considered an endorsement of that product. This newsletter is for informational purposes only and should not be considered authoritative on any topic. Please seek advice from an appropriate professional on any specific issue.

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