Lease And Loan Gap Coverage ~ Motorcycle Insurance

Lease and loan gap coverage can be an essential part of motorcycle insurance, because it covers the “gap” between what you owe on your motorcycle lease or loan and what the insurance company would normally pay if the bike were totaled or stolen!

This type of motorcycle insurance coverage is often required by leasing and financing companies.

Below is information about lease and loan gap coverage, what most motorcycle insurance companies will cover with it, what isn’t covered, how much it costs, and how to choose the right coverage limits.

Lease And Loan Gap Coverage Insurance
When you lease or finance a motorcycle, at any given moment, the amount you owe could exceed your bike’s actual cash value, especially in the early days of the loan and if you own a newer motorcycle. This is because of depreciation – the value of your motorcycle can drop significantly as soon as you ride away from the dealership.

To help protect yourself financially, you can buy gap coverage insurance, which can be purchased from your motorcycle insurance company (and sometimes from dealerships, leasing companies, and lenders).

What Does Lease And Loan Gap Coverage Insurance Cover
Gap coverage can provide a measure of financial protection, so that if you lose your motorcycle (because it’s totaled or stolen), you also aren’t on the hook for paying off the excess amount that you owe on the lease or loan.

Difference Between The Actual Value Of The Motorcycle And The Amount Owed On The Lease Or Loan: Gap insurance covers the difference between the insurance payout (based on your motorcycle’s depreciated value) and the amount you still owe on your lease or loan.

Applicable Deductibles: Some gap insurance policies may also cover the deductible on your primary motorcycle insurance.

What Doesn’t Lease And Loan Gap Coverage Insurance Cover
Gap insurance is strictly related to the value of your motorcycle (at the time that it was totaled or stolen) and your lease or loan balance.

Gap insurance typically doesn’t cover:

  • late loan payments, penalties, or fees associate with your financing agreement
  • lease penalties (for early termination of the lease, wear and tear, etc.)
  • extended warranties or added features that you might have financed
  • non-standard equipment or personal property
  • negative equity (if you rolled over negative equity from a previous lease or loan, the additional amount isn’t usually covered)

Cost Of Lease And Loan Gap Insurance
The cost of gap insurance is relatively low, particularly when you compare it to the risk you’re taking if your motorcycle is totaled or stolen.

How To Choose The Right Lease And Loan Gap Coverage Limits
Deciding how much gap coverage you need – and even whether you need it – should be based on the value of your motorcycle, the terms of your loan or lease, and the rate at which your motorcycle model is expected to depreciate.

Check With Your Insurance Agent Or Company
Please note that the information provided above is for informational purposes only. For the most accurate, up-to-date, specific information, check with your insurance agent or insurance company.

take away messeage


Gap insurance doesn’t usually cover late loan payments (and the associated penalties and fees) or lease penalties (such as for early termination of your lease or excessive wear and tear on your bike).