Why You May Want GAP Insurance to Protect You After a Bad Car Crash
You may be surprised by how easy it is for a car to get totaled in a crash. (Totaled means the cost of repairing the damage is greater than the value of the vehicle. (Some companies consider 80 percent of the value to fix a vehicle to also be deemed a total loss). If your vehicle is more than a few years old, anything more than minor damage could be enough to total it.
In recent years, research has found people keep their cars a lot longer than they used to. Drivers delay buying a new vehicle or buy a used one instead. This may make it much more likely for a lot of vehicles on the road to be totaled in a crash.
If you still owe money on your car loan when your car gets totaled, and you owe more than the value of the vehicle, you may need financial help. Many people do not have thousands of dollars in cash they can use to pay off a loan.
That is why drivers should strongly consider purchasing GAP insurance. Learn more about GAP insurance below.
What You Need to Know About GAP Insurance
GAP stands for guaranteed asset protection, and you can buy this type of insurance for a variety of vehicles, including cars, motorcycles, light trucks, jet skis, ATVs, snowmobiles and boats.
If you buy this insurance, it should help you avoid a financial crisis if your vehicle is totaled. If you owe more than the vehicle is worth, GAP insurance covers the difference, so you do not need to. The rest of the loan balance is paid off with the settlement provided by the insurance company.
GAP policies vary in terms of other features that may be available. For example, they may waive a portion of your deductible, which is the amount you must pay up front before the insurance policy kicks in and provides coverage. Some policies may give you additional money to help you in buying another vehicle. You should carefully review the terms of a policy and ask the insurance company for clarification on anything you are unsure about.
You never know when your vehicle may be totaled after a crash. If it happens, you are still going to need reliable transportation to get to doctors’ appointments and to work, if you can work. If you are on the hook for the rest of your loan balance, it may be much harder to get a new vehicle.
With GAP insurance you should have one less problem to deal with after a crash. You want to be focused on your medical treatment and recovery, which is also why you should strongly consider hiring an attorney to help you pursue compensation for the damages you suffered in the crash. While using GAP coverage may be relatively straightforward, the insurance company may not make things so easy when seeking compensation for medical expenses and other damages.
Do Insurers Place Restrictions on GAP Insurance?
There may be certain restrictions on your ability to buy GAP insurance. For example, the Allstate website says some insurers only sell GAP insurance to those who have brand new vehicles. Insurers may limit GAP coverage to those who have vehicles no more than two or three years old, or to the original owner of the vehicle.
When Might GAP Insurance Be Worth it?
The Insurance Information Institute recommends buying GAP coverage if you have a loan that is 60 months or more, you paid less than 20 percent down, or if you leased your vehicle. If you leased your vehicle, the lease agreement may already include GAP coverage.
You may also want GAP insurance if you bought a vehicle that tends to depreciate faster than the average vehicle or if you rolled negative equity from an old car loan into your new loan.
Having Trouble with Your Insurance Company? Call Today
Our experienced St. Paul auto accident attorneys know insurance companies are not looking out for the best interests of their policyholders. Their concern is making money and holding onto it for as long as they can. That means they have a strong incentive to deny or devalue claims, or simply drag their feet in hopes you will be desperate for compensation and will accept a lowball offer.
Car crash victims need a strong advocate who is looking out for their best interests. In fact, victims who hire an attorney often receive more compensation than those who do not.
Our firm has obtained $1 billion in compensation on behalf of our clients and there are no upfront fees for our services.
Give us a call today. We are ready to help. (612) TSR-TIME