When You Should Consider Carrying Gap Insurance
Hessig and Pohl are personal personal injury attorneys who represent auto accident victims. We understand how insurance companies work. This video explains how insurance companies will often pay less than you owe on your vehicle and how you can avoid a payout that is less than your auto loan.
Marty Pohl Explains How Gap Insurance Works & When You May Need It
Usually when the topic comes up, it’s not a pleasant conversation. Clients often say, I wish I would have known about gap insurance sooner. I wish my insurance agent would have recommended gap insurance when I bought my vehicle. The goal of this video post is to help you from future headaches. Gap insurance applies in different scenarios.
If you buy new cars, if you buy used cars, or buy cars at ‘pay here’ lots, you want to watch this video to the very end.
Let’s say that you bought a new vehicle, and you pay $50,000 for that new car. Most people understand depreciation and that from the moment you drive a car off the lot, that vehicle is no longer worth $50,000.
Vehicles depreciate the second you drive it off the lot. If you are in a wreck a week later and that vehicle is now only worth $40,000. You ask Hessig and Pohl to represent you in the wreck with the insurance company.
The insurance company is only required to pay you fair market value of the vehicle. Right? The fair market value from the moment you drive off the lot is depreciated. It’s only 40,000 now.
Your insurance company will pay you the $40,000 fair market value for the vehicle. However, you still owe $50,000. Then the client is asking, ‘how do I make up that difference?’ That’s where gap insurance pays off. It makes up the difference between what is owed and the fair market value payout of the vehicle.
Anytime that you’re in a situation where you would potentially owe more than the fair market value of the vehicle, then gap insurance is beneficial. If you have any questions as to whether you might need gap insurance, check the value of your vehicle. There are plenty of resources online to check the value like Kelly Blue Book and NADA.
There are several great resources. Check the value of the vehicle, verify how much you owe, and then ask yourself if you were in a wreck today will the insurance payout be enough to cover the vehicle payoff amount. If the answer is no, then you probably need to evaluate purchasing gap insurance.
If you end up needing it, you will save a lot of headaches. I hope this was helpful and informative. I look forward to talking to you soon.