Gap-Insurance, What is it exactly, do i really need it? well here is the truth in no uncertain terms, explained simply, and straightforward.
Only you can decide whether or not, you need Gap-Insurance for your car. At the time you purchase your particular car insurance, it is important to carefully review what is included and not included. You need to know what the limits of coverage are, and what your deductibles are.
Medical Coverage Limits?
Physical Damage Limits?
Comprehensive Limits?
When you have a car accident, and the damage is severe, the insurance generally will pay one of the following, whichever is less.
1. The amount necessary to repair the car
2. The actual cash value (ACV) of the car
Say the particular damage to your "Mercedes" was sever as in my sisters case? She had Sever Water Damage to her's. The Cost to fix the problem was well over $10,000 but the ACV Was much more. Hence, they paid to repair it.
The ACV is the amount the car would be worth to a person who might want to buy your car, the insurance agency will use many forms of evaluating this. They might use a Kelly Blue Book value? and look up what your car might be selling for at local car dealerships, and even private parties that have listed their own cars.
Let's use an example:
You have a Financed Vehicle with Union Bank of California, the balance of your loan is say $10,000. Your car is totaled, and the insurance company plans to only give you $8500.00for it. You my dear consumer, are on the hook for the balance of $1500.00.
Let this sink in for a minute! Your going to be required to continue making payments on a car you no longer have in your possession!
Gap-Insurance, would cover the difference for you!
I have unfortunately seen this, time and again in the car business. It is my opinion that the only time you should pay for Gap Insurance, is when you are financing your vehicle!
You are going to need to have full coverage insurance anyway, (at least in California) because any financial institution is going to require it, to protect their interests.
The last thing you need to worry about, after a vehicle is totaled, is whether or not, your still going to owe money on it. [removed]// // ]]>[removed] Checkout Lemon Law Explained
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