Gap Insurance fills need during natural disaster

WASHINGTON, DC (September 12, 2018) — Car insurance is complicated and coverage requirements vary from state to state, allowing consumers to purchase minimum coverage to full coverage insurance. Apart from the normal collision and financial protection against physical damage or bodily injury resulting from traffic collisions, there are other forms of insurance that equally important.  One such product is Guaranteed Asset Protection “GAP” Insurance.  This type of insurance covers the difference between what you owe on your vehicle and what the vehicle is worth. Your automobile loses market value the moment you drive off the lot.  Hopefully, nothing happens to your vehicle (and yourself).  However, these things happen.

GAP insurance can fill a need when natural disasters, such as hurricanes (but the U.S. has also had massive flooding, wildfires, etc.), hit suddenly and cause massive property damage. In fact, there are some state laws that require GAP Insurance on all vehicle purchases.  It is a product that is often overlooked for a variety of reasons.

There are many military members in the path of Hurricane Florence. This could mean their personal vehicles stay in harm’s way. If the vehicle is new, and they were unable to purchase GAP insurance they may owe a lot for their totaled vehicle at the same time they are also dealing with other personal property losses.  The impact is very detrimental in terms of maintaining a healthy state of financial readiness.

However, recent MLA Guidance has restricted the sale of GAP Insurance, which has essentially banned the product from being offered to military members. This has effectively put military members in a discriminated class, as their civilian counterparts are still able to protect themselves. Ironically, the consumer protections intended in the MLA have created a whole new class of consumer protection issues.  We can do better for our military.

The Defense Credit Union Council continues to advocate on behalf of military members so they have the option to purchase GAP insurance, especially those living in areas prone to natural disasters and for which they are exposed to financial loss. The Council is in its 55th year of dedicated financial education and raising the standard of financial services to our 23 million current and former military members.

About Defense Credit Union Council (DCUC)

The Defense Credit Union Council is the premier resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, the Council champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, the Council’s membership is comprised of 180 credit unions with over 35 million members. If you would like more information about this topic, please contact DCUC at


Haleigh Laverty



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