Should I Get GAP Insurance?
For many of our clients, gap insurance comes in very handy. Gap insurance covers the balance on how much you owe after your car insurance pays you for the value of your car.
For example, letís say your car was only worth $15,000 before the crash, but you owe $20,000 on it. The car insurance company will only pay you for the value of your car and not how much you owe on it.
That is all they have to pay you legally. How much you owe on the car has nothing to do with how much they are required to pay you. So in this situation, all they will pay you is $15,000. They will pay that amount to whoever loaned you the money for the car. After paying $15,000, you will be left with a $5,000 balance on your loan Ė and no car.
As you can tell, this can be a very upsetting situation. If you have gap insurance, your gap insurance would pay the $5,000 balance. This would leave you with no car, but also no debt. Hopefully, you do not get into a crash where your car is totaled, but if you do, gap insurance can prove to be very helpful.
ABOUT THE AUTHOR: Lem Garcia
West Covina car accident law office, Lem Garcia Law, was opened to give people who were injured in a car accident a place to turn when they need help the most. I am a lifelong resident of West Covina and my goal is to help the area as much as I can. I am the youngest of three boys and the son of an engineer and hairstylist. I went to public schools in West Covina and went to college at Cal Poly Pomona. I went to law school in Western State University College of Law. I believe that by helping injured victims, I am making a difference in their lives.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.