Legal Term
auto repair warranty gap coverage contract
Legal Definition
A legally binding agreement where a third-party provider offers supplemental financial protection to cover the difference between the total cost of auto repairs and the amount paid by a primary warranty, addressing exclusions, deductibles, or limitations in the standard coverage for parts, labor, or services.
In Plain English
This contract pays for car repairs that your basic warranty doesn't fully cover, so you don't have to cover the leftover costs yourself.
Example in a Contract
Clause 5. Gap Reimbursement: Upon approval of a valid repair claim, the Gap Coverage Provider shall reimburse the Vehicle Owner for 100% of the eligible out-of-pocket expenses incurred for parts and labor excluded from the OEM Warranty, subject to a per-incident maximum of $3,000 and an annual aggregate limit of $10,000, as detailed in Schedule B.
This content is for informational purposes only and does not constitute legal advice. Always consult a licensed attorney for legal matters.