No, Gap insurance would not pay your car payments if you went on medical leave from your job. Gap insurance pays out when your vehicle has been determined to be a total loss as a result of a covered loss situation such as a collision or it being stolen.

For Gap insurance to start paying out your car must be found a total loss and a primary insurer pays out the actual cash value (ACV) for the vehicle so that Gap can play the balance of the loan after the ACV settlement amount. When you have taken medical leave from your job there is no covered loss regarding your vehicle for Gap insurance to be get involved and pay out monies. Gap insurance does not pay out for car payments on a car that is not a total loss.

If you get behind in your car payments due to the medical leave and not keeping up with your payments and then had an accident which resulted in a total loss, Gap insurance at that point would still not pay for the missed car payments.

In general most gap coverage does not cover any interest the lender charges you, late fees, and missed payments. If you take a payment holiday from your car payments during your medical leave, which some finance institutions allows, it is seen by gap insurers as missed payments or payments added onto the back end of the loan that really should already been paid and thus not covered either.

Notable typical GAP exclusions include:

• Overdue lease/loan payments
• Financial penalties imposed under a lease for excessive use
• Security deposits not refunded by the lessor
• Costs for extended warranties, credit life insurance, or other insurance purchased with the loan or lease
• Amounts deducted by the primary insurer for wear and tear, prior damage, towing, and storage
• Carry-over balances from previous loans or leases
• Equipment added to the car by the buyer, meaning that only factory-installed equipment is covered

To find out for certain if your gap insurance would pay out anything if your car would be totaled out in a covered loss after you had missed payments due to your medical leave from work you should check with your gap insurer and read carefully through your gap insurance policy documents.