So, let’s say you are going car shopping and found the car you want. It’s a $50,000.00 new shiny red Chevy Camaro. You take it out for a test drive, talk to the car salesman and decide to do it. You fill out all of the paperwork and they give you the keys. You are so excited to finally get your new car out on the road. One year later, someone runs a red light and smashes into your Camaro. What do you do now? You may have questions about insurance moving forward. This blog will talk to you about GAP insurance and the benefits of having it.
What exactly is GAP insurance?
GAP insurance is insurance that you purchase to cover your vehicle in case it is totaled. So, let’s say that Camaro that you bought for $50,000.00 is something you financed. And you financed that car for the full amount. You have been making payments on that car for $500 a month. So, after one year, you still owe $44,000.00 on the loan. But when you look up the value of that car, it is now only listed at $35,000.00. That is the amount the insurance company is offering you. That amount is usually the Kelly Blue Book value of that car. Well that leaves you with $9,000.00 outstanding on that loan that would be your responsibility. So, what gives?
Well that is where GAP coverage would come into play if you purchased it as part of your insurance policy. GAP coverage would step in and pay that extra $9,000.00 on your loan so that the car would be paid off. Without it, you would still owe the $9,000.00 on the loan yourself.
What does GAP insurance cover?
GAP insurance covers your car when it has been totaled, no matter how it was totaled. If it was due to a hurricane, a flood, vandalism, theft, car accident etc., GAP will cover it. So in the scenario above, when someone runs a red light and smashes into your car, your GAP insurance will kick in and cover the remaining amount on your car loan.
Is GAP insurance expensive?
GAP insurance is something that you can purchase from the dealership at the time you buy the vehicle, or from your auto insurance carrier. If you decide to do it at the dealership, you are likely going to overpay for the coverage. The best thing to do is to contact your auto insurance company and ask them about adding GAP coverage to the vehicle on the policy itself. It usually is inexpensive to add to your insurance policy. You would want to contact your auto insurance carrier and inquire about the rates for GAP coverage and how much it would raise your premium.
Should you purchase GAP insurance for your automobile in Florida?
At the end of the day, for the amount you would be paying every month for the GAP coverage, it is worth it. The last thing you want is to be stuck footing a bill for tens of thousands of dollars in the event your car gets totaled and you still owe money on the loan. Now obviously if you purchased a car outright and paid cash for it, there would be no need to have GAP coverage. Again, GAP is only necessary if you have financed a vehicle and have a loan that you pay on every month. If you are not in that predicament, then GAP coverage is not something you would ever need.
Call the Lopez Law Group Today!
If you purchased GAP insurance and your insurance company is now refusing to honor your claim for the damaged vehicle, we may be able to help. The personal injury attorneys at the Lopez Law Group can look into your accident, evaluate whether or not you may have a valid claim for the withholding of your GAP insurance coverage. We can be reached at 727-933-0015. Contact us today if you feel as though your GAP insurance benefits are being wrongfully withheld by the insurance carrier.