Gap Coverage Calculator

Formula

The formula to calculate the Gap Coverage (GC) is:

\[ GC = TC - AP \]

Where:

$ GC $ is the Gap Coverage (USD)
$ TC $ is the Total Cost (USD)
$ AP $ is the Amount Already Paid (USD)

What is Gap Coverage?

Gap coverage is the amount that remains to be paid on a loan or debt after accounting for payments already made. It is often used in the context of auto loans or insurance, where it refers to the difference between the actual cash value of an item and the balance still owed on the financing. Gap coverage is important for ensuring that a borrower or insured party is not left with a financial deficit in the event of a total loss.

Example Calculation

Let's assume the following values:

Total Cost (TC) = $20,000
Amount Already Paid (AP) = $5,000

Using the formula to calculate the Gap Coverage:

\[ GC = 20000 - 5000 = 15000 \text{ USD} \]

The Gap Coverage is $15,000.