Credit Union Protection Plans

Q: What exactly is a credit union protection plan like GAP, Mechanical Repair Coverage, and Debt Protection?

A: Purchasing a credit union protection plan can be a great way to ensure your loans and income are covered in any eventuality, but navigating the choices can be confusing.

Here’s what you need to know about the protection plans available at USAgencies Credit Union.

What is GAP insurance? 

GAP (guaranteed asset protection) insurance is an auto insurance add-on that pays the difference between the depreciated value of your car and what you still owe on the car in the event that your car is stolen or totaled. GAP insurance is only available for the current borrower on an auto loan, or current leaseholder, on the new vehicle. Coverage can also be available for eligible motorcycles, boats, RVs and campers.

GAP insurance is often recommended for drivers purchasing an expensive, new vehicle, considering that most new vehicles depreciate by 19% in their first year of ownership. This causes many drivers to be under water on their auto loans toward the beginning of the loan’s term.

Is GAP insurance for everyone?

GAP insurance is a great idea for all borrowers, but especially recommended for drivers who are, or may be, upside down on their auto loans. Drivers who have made a down payment of less than 20% on the auto loan, and/or who have a loan term that is 60 months or longer, will usually fall into this category.

GAP insurance is also a good idea for drivers leasing a new vehicle. Some leases will automatically include GAP coverage in their contracts.

What is Mechanical Repair Coverage? 

Collision insurance covers damage to your vehicle caused by accidents. Comprehensive coverage will pay for damage caused through other means, such as a windshield shattered by a rock. But who pays for damage caused by the natural wear and tear of a vehicle?

This is where Mechanical Repair Coverage (MRC) comes in. MRC will cover almost any kind of breakdown in your vehicle due to wear and tear so you don’t have to pay for these repairs on your own. Similar to purchasing an extended warranty on a vehicle, coverage can include a faulty transmission, a broken carburetor or a brake repair. MRC will not cover regular maintenance and upkeep of the car, such as replacing spark plugs, refiling fluids and changing the tires.

Is Mechanical Repair Coverage for everyone? 

Mechanical Repair Coverage (MRC) is especially recommended for drivers financing a new vehicle, as the repairs on these vehicles can be quite costly. An extended warranty may offer the same coverage, but is usually more expensive than an MRC plan.

In addition, it can be a good idea to purchase MRC for a vehicle the driver intends to keep for more than five years. MRC will also help ensure that the car remains fully functioning for years to come.

What is Debt Protection?

Life can be wonderful. But it can also get complicated when unexpected things happen. Protecting your loan payments against
death, disability, or involuntary unemployment could help protect your finances. Debt Protection provides income in the event that a policyholder is unable to earn an income due to a injury, disability or job loss.

According to the Social Security Administration, more than one in four 20-year-olds will experience a 90-day disability before they turn 67.

Is Debt Protection for everyone?

Purchasing Debt Protection can be a financially responsible move for any policyholder. This protection could cancel your loan balance or payments up to the contract maximums. Protect your loan payments today so you can worry a little less about tomorrow.


Protecting your loans, debts and earning potential can seem like a daunting task, but with the right plans in place, you can maintain your financial wellness for years to come.

Connect with USAgencies Credit Union for a quote or info on all your Loan Protection Needs today!

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