Gap Insurance: What is It? When Do I Need It? How Do I Get It?

Posted: Apr 09, 2008 | Comments: 0 | Views: 740 | Bookmark and Share

You're sitting in your car listening to James Taylor on the radio as you wait for the red light to change, when the kid behind you looks down to change the song on his Ipod and slams into the back of your car. The insurance company sends an adjuster out to inspect the damage. A settlement offer arrives in the mail two days later but the insurance company is offering $2,800 less than what you owe on your loan, what can you do?

Most Americans have never heard about gap insurance and if they have, they probably heard about it after an accident and wondered why no one told them about it earlier.

Gap Insurance is a small insurance policy on your car loan that kicks in when the amount the insurance company will pay for your totaled or stolen car is less than what you actually owe on the loan or lease. However, most car dealers or auto loan officer leave Gap Insurance out of the sales agreement or loan documents without asking you if you want it. If you don't have it, you could be upside down on your loan for an accident you didn't cause. Here's what you need to know next time you buy a car:

- Always ask the sales representative and the loan officer if Gap Insurance is included in your loan or purchase price.

- Always get Gap Insurance if you are leasing or financing at least 70% of the value of the car.

Insurance companies will only pay what your vehicle is worth at the time of the collision. If it turns out the deal you got from the dealership wasn't a deal at all (Insurance companies value cars based on similar cars in your market, check with autotrader.com or your local classifieds for the current value of your car) or you rolled debt from your last car into your current auto loan, gap insurance will save you money if your car is totaled or stolen.

Contact your lien holder to find out if gap insurance was included in your loan. If it wasn't, most lien holders will let you add gap insurance (even if you didn't get the coverage when you bought the car) since they would lose the collateral for their loan if the car is totaled in an accident. If your lien holder doesn't offer gap insurance there are numerous insurance providers online that provide independent policies. Just make sure they have top marks from one of the rating services such as A.M Best, Standard & Poor's or TheStreet.com Ratings. Most gap insurance policies average $5 to $10 a month. You may never need to use it but for the price, it's a good thing to have!

(ArticlesBase SC #382900)

Rate this Article
  • 1
  • 2
  • 3
  • 4
  • 5
  • 2 vote(s)
    Feedback
    RSS
    Print
    Email
    Re-Publish

    Source:  http://www.articlesbase.com/law-articles/gap-insurance-what-is-it-when-do-i-need-it-how-do-i-get-it-382900.html

    Article Tags:

    Accident Lawyers

    ,

    auto accident attorney

    ,

    accident attorneys

    ,

    accident lawyer

    ,

    Accident Attorney

    ,

    Accident Attorneys Utah

    ,

    Accident Law Firm

    ,

    Accident Law Firms

    ,

    Accident Lawyer Utah

    ,

    Auto Accident Attorneys

    ,

    Auto Accident Attorneys Utah

    ,

    Auto Accide

    Lean About Michigan Attendant Care Benefits

    Michigan Auto Accident Lawyer, Larry Gursten, explains Michigan Attendant Care Benefits, procedures for filing no fault auto insurance claims and the strict 1 year time limit. Larry Gursten leads Michigan's largest law firm. (03:42)

    Major Types of Insurance for Medical and Rehab

    You never know when an accident may occur, resulting in an injury. Fortunately, there are many different types of insurance to help cover a portion or maybe even all of the costs associated with recovery. (03:31)

    Insurance Tips: Auto Accidents

    Accidents happen. That's why we need a crash course on what to do when cars collide. (02:19)

    How to Understand Travel Insurance

    In this travel video learn all about international travel, like what is travel insurance and the importance of it. (03:11)

    Know Your Rights: Insurance

    If an insurance company denies your claim what are your rights? Join Apprentice winner Stephanie Shaeffer as she gives the legal lowdown. (01:32)

    As cell phones have tripled in use over the last decade, so has their popularity. Individuals find cell phones to provide convenience to their lives, however, many individuals who use cell phones while operating a vehicle actually increase the risk of being involved in an accident. Several studies in recent years have discovered that cell phone use in automobiles can be deadly.

    By: Peter Kent l Automotive l Apr 18, 2008 l Views: 1,191 l Comments: 1

    You need a bicycle accident attorney to understand your rights. If you are unfortunate to be in a bicycle accident, you need a bicycle lawyer to guide you through the particular legal issues regarding bicycle law. Bicycle lawyers such as Nadrich and Cohen are experts in bicycle law. We advocate for our cyclists rights throughout our legal representation.

    By: Jeff Nadrich l Law > Personal Injury l Dec 16, 2008 l Views: 180

    This article explains what arbitration is and how it may be in your best interest.

    By: Kenneth Christensen l Law l Apr 20, 2008 l Views: 42

    Finding out that breast cancer had gone undetected or misdiagnosed by a skilled medical professional can be devastating.

    By: Patricia Woloch l Health > Cancer l Jan 17, 2008 l Views: 121

    If you were in an accident you may be wondering: Do you have a case? Each lawyer has his own screening criteria but they will generally follow this pattern: 1) Were you injured? Sometimes mere injury isn't enough. Some states require a "permanent injury" before you can recover non-economic compensation in a...

    By: Rex Bush l Law l Jul 09, 2009 l Views: 58

    People perform a search on these marriage records for several reasons and because of its significance as well. These records can be checked by anyone anytime because they are centrally updated.

    By: Ben Dave l Law l Feb 09, 2010

    According to our local welfare department and my own research on the subject, it is perfectly legal for small children to be transported on the back of motorcycles. I argue that it shouldn't be so in this article.

    By: Lucille Uttermohlen l Law l Feb 09, 2010

    DUI is driving under the influence of alcohol or drugs and therefore, it is definitely a serious offence. Police are very strict on those who are suspected with DUI and if they wish they can stop anybody and question about the influence.

    By: Oleg Oreemev l Law l Feb 09, 2010

    8 Steps you must do if you have been injured in a Bicycle Accident provided by Florida Bicycle Accident Lawyer James W. Dodson. The steps you take immediately after a bicycle accident can make the difference in successfully holding the car driver responsible.

    By: James Dodson l Law l Feb 09, 2010

    If you are looking for police records data, you can obtain them without any trouble or expensive fees. All that you have to is get access to the internet and you will have access to all police records that you need for free.

    By: James Nash l Law l Feb 09, 2010 l Views: 1

    Professionals within the public sector can now rely on an array of tools and resources for dedicated support.

    By: Paul Buchanan l Law l Feb 09, 2010 l Views: 1

    Getting public arrest history records is not hard as it used to be in earlier years. Today you can get access to arrest records fast and free and you can do all of that online from your own home, totally free.

    By: James Nash l Law l Feb 09, 2010 l Views: 5

    If you ever wanted to search anybody's criminal reports you must know how hard that can be sometimes. But it doesn't have to be that way because today you can find and access all the records that you need free via the internet.

    By: James Nash l Law l Feb 09, 2010 l Views: 1

    Most children love dogs and the playful companionship they provide. However, dogs can suddenly lash out in violent and aggressive behavior. The following article offers important safety tips to teach your children to help prevent a dog bite or attack.

    By: Kenneth Christensen l Home and Family > Pets l Aug 10, 2009 l Views: 45

    One of the most common injuries resulting from car accidents is whiplash. Symptoms from this injury can be debilitating and last months or even longer. This article analyzes the symptoms of whiplash and provides information on how to treat whiplash injury from home.

    By: Kenneth Christensen l Sports and Fitness > Fitness l Jul 29, 2009 l Views: 154

    Drivers often fall into simple driving mistakes that can have lethal consequences. Distracted driving, overcorrecting, and swerving are all common mistakes that can lead to serious accidents. Here is a short summary of four of the most common types of lethal driving mistakes.

    By: Kenneth Christensen l Automotive l Jul 14, 2009 l Views: 190

    Governor Jon Huntsman Jr. signed a new bill that will abolish some of Utah's stricter liquor laws. Some Utahns are happy with this new bill, while others opposed it and advocated for stronger concessions as it was being written.

    By: Kenneth Christensen l Law l Apr 01, 2009 l Views: 151

    Insurance companies often use different tricks to avoid paying claims. Some insurance providers intentionally write their policies using dense and difficult language. Other companies will use your credit score to justify increasing your claim.

    By: Kenneth Christensen l Law l Feb 09, 2009 l Views: 150

    Being involved in an accident is a frightening and confusing event. Your actions after an crash can have long-lasting affects as you work with your insurance company. Here are a few tips that will help you make the right decisions after a car accident.

    By: Kenneth Christensen l Law l Feb 02, 2009 l Views: 39

    Cell phone use among motorists are causing distracted driving, which can lead to accidents resulting in serious injuries or fatalities. Utah legislators are proposing new bills which would ban all cell phone uses while driving an automobile.

    By: Kenneth Christensen l Law l Jan 25, 2009 l Views: 394

    After a Utah car accident, people have to face the daunting task of settling on car damage claims with their insurance companies. Many people feel their insurance adjuster's settlement offer for the car is unfair, but don't know what to do. If you have been in an accident and are trying to handle the property damage portion of your claim, these following tips may be able to help you.

    By: Kenneth Christensen l Law l Jan 25, 2009 l Views: 127

    Add new Comment

     
    * Required fields
    Author Box
    Articles Categories
    All Categories
    0