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Claudia Said:

i have gap insurance and my vehicle was lost due to flooding-what does my gap insurance covers?

We Answered:

Generally speaking GAP will cover the difference between fair market value and the amount you owe on the loan. However, if you are any payments behind it won't cover them, and if it is totaled using collision coverage, you will be responsible for the deductible amount.

Collision would depend on whether or not it was your fault. If you drove through standing water, that would be your fault.

Ethel Said:

What exaclty does GAP insurance cover?

We Answered:

Answer from a General Insurance Agent

Gap Insurance is [xxx redacted xxx]. You may have noticed that it is typically sold by auto dealerships, Not by Real Insurance companies or any Insurance Agent I have ever known.

The fly by night companies set up to issue these policies generally are what we call "mono-line", meaning that it's all they sell, nothing else. The language of the policy usually has so many restrictions and exclusions that even attorneys have trouble understanding exactly what they will pay for. They usually indicate that the coverage is not valid unless a standard auto insurance policy is in place and carry a host of restrictions and exclusions designed not to ever have to pay out.

These polices usually cost anywhere from 600 dollars up to 1600 hundred dollars and the dealership receives a commission of 40 to 60 percent of the amount you paid for it, meaning the dealership profited from 300 to 900 hundred dollars for convincing you to buy it.

We have heard many nightmare stories over recent years about these policies which most Insurance agents don't even consider Insurance. In the insurance industry Gap coverage is lumped into the same category as pre-paid legal scams.

I have only known of one person who ever successfully got paid from a Gap Policy and that was only because she filed a complaint with the state insurance regulators and she was an attorney. So, as you indicate that at least there was some kind of eventual payout you would be the second

The government should really do something about this growing problem.

The only thing I can recommend is to file a claim bide your time and hope there will be an eventual payout.

You may also file a complaint with your state Insurance regulatory authority.

and "Yes" your finance company can bill you for any unpaid balance, Remember you are liable for your finance note, The insurer is only liable by virtue of your insuring contract which is between you and the insurer not between the insurer and your finance company, so it is your job to make sure they pay up in a timely manner.

Good Luck and Happy Motoring

Stephen Said:

Gap insurance cover me?

We Answered:

Gap pays the difference between what your car is worth, and the loan payoff amount, if your car gets totalled. Your "full coverage" only pays what the car is worth, minus your deductible.

I'd question the validity of that gap coverage, though - most of the time, you can't buy it on a car more than a year or two old. If your car is "worth" $4500, and you paid twice what it's worth, you got robbed by that salesman who sold it to you for twice what it's worth. And I'd read the small print in the GAP coverage very, very, very closely - because I think there's going to be some kind of "out" for a car that's old enough to have depreciated down to $4500.

It's also very odd that you got a bank to lend you twice as much money for a car, than it's worth.

Christopher Said:

How long does gap insurance take to process?

We Answered:

All that GAP covers is the gap. If you are in an accident that totals your car, once the insurance gives you fair market value, GAP will step in and pay off the difference to the lender between what they were given as fair market value, and what you actually owe.

It all goes to the lender. You get nothing. So it should not slow or speed up your getting another car.