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Imagine you just purchased a brand new Suzuki GSX-R1000 motorcycle two months ago, and it was stolen right before your eyes as you were eating in your favorite restaurant. Not to worry, you are fully protected by the full coverage motorcycle insurance policy your motorcycle lender required you to get. Right?

In most cases, not exactly, if you look into the details of the motorcycle insurance policy you purchased. The reason is that most full coverage motorcycle insurance policies will cover for total loss such as theft, accident or natural disaster, but these policies typically only cover the depreciated market value of the motorcycle not the outstanding value of your motorcycle loan.

Therefore, if you opted for a zero down payment motorcycle loan or perhaps a low payment credit card motorcycle loan, your Suzuki GSX-R1000 may have depreciated faster than you have paid down the value on your motorcycle loan. Since your motorcycle insurance policy will most likely only cover the depreciated market value of your Suzuki GSX-R1000, you are responsible for the difference in the value the insurance company pays you for your stolen or totaled motorcycle and what you actually owe on your motorcycle loan.

In the event a motorcycle is stolen or totaled, motorcycle buyers in the first two years of a motorcycle loan are the most susceptible to not being reimbursed enough from their motorcycle insurance policy to cover the value of their motorcycle loan. So what is a motorcycle buyer to do to protect against the outstanding value of their motorcycle loan?

The answer for some motorcycle buyers lies in a little known policy called gap insurance. Gap insurance is a total loss insurance policy that will pay the difference of the amount your motorcycle insurance company pay

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