Gap Insurance can save you thousands of dollars if you are involved in a serious accident or your car is stolen. Gap Insurance can also be called “totaled” or stolen car insurance.
Gap Insurance is a way to close the gap between your auto insurance company’s payment if your vehicle is stolen or totaled and your auto loan payoff.
In other articles, I have written about how insurance companies “lowball” their policyholders when it comes to totaling a car. It can get worse if you are not at fault and the other driver is paying your claim. Gap Insurance is a great way to get peace of mind and all the money you’re entitled to.
Here’s an example. A new car is purchased for $25,000. You finance for 60 months with no down payment. Your car is taken two months later. Your car is stolen two months later. The adjuster bases his WAG (wild-a** guess), on depreciation, and calculates that it’s worth only $20,000 after having lost 20%. Your payoff will be $27,000, including tax, title and license fees.
How will you pay off the car if the insurance company won’t pay $20,000 and you owe $27,000? No problem if you have Gap Insurance
You might be eligible for Gap Insurance for the following reasons:
1. Leasing cars – Often, the leasing company will require that you purchase Gap Insurance when you lease a vehicle. The vehicle may be worth less if you exceed the mileage limit during your lease term. Many companies allow you to purchase Gap coverage anytime during your lease term.
2. Gap coverage may not be required for new cars. If you are like most people these days and sign 0% down financing deals, your car may depreciate a lot in the first year and you won’t get the car’s payoff value due to theft or damage.
3. Used cars – It is possible that you have paid more for a car than the vehicle is worth. If the car is less then 2 years old, many Gap Insurance companies will offer coverage.
4. “Underwater” and “upside down” are terms that indicate you owe thousands of dollars more than the car’s value. This is often the case when someone trades in a vehicle and owes more money than the car’s value. You can add the balance of the trade-in to your new car loan amount by contacting the finance company. Without Gap Insurance, you will likely be always “upside-down” with your loan and in serious financial trouble.
For Gap Insurance to be valid, most insurers will require that you have Comprehensive and Collision coverage. Many insurers will require that you continue to make your car payments until the benefits are paid.
Gap Insurance can be purchased through a variety of car insurance companies. To find out if your insurance company offers it, contact them. You can also search the Internet to find Gap Insurance companies. There are many options.
You need to be able to win your insurance claim strategies if you have suffered a loss of property due to fire, wind, flood, or any other cause. I will tell you how to file a claim. The insurance company won’t. I will help you take control of your insurance claim and increase your settlement by hundreds, if not thousands. You can find more information at the following website.
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