Imagine going to sell your car to trade for another, and suddenly, your current car is worth a lot less than you thought. The unprecedented change in value was all because it received substantial damage in a car wreck.
Unfortunately, despite repairs, the damages led to significant damages that consequently tanked the appraised value of your car.
Car accident victims may find themselves in this situation. The reduction in value is so substantial that it leaves victims owing more than the car is worth.
At times, victims owe to lenders despite no longer having their car.
Car accidents levy serious amounts of property damage to victims, where they find themselves stuck with a vehicle that is suddenly worth much less than before. Fortunately, there is something called gap insurance, which is meant to cover you if this happens.
Do not let this happen to you. When you are facing hardship recovering the amount owed, call Bert McDowell Injury Law immediately. Our team of Bridgeport car accident attorneys has decades of experience in solving cases like yours.
Don’t wait and call us at (203) 590-9169 or reach us online by submitting our online form.
Get Help From a Bridgeport Gap Insurance Attorney
Gap insurance, which stands for Guaranteed Asset Protection, is an additional insurance policy used to supplement a driver’s current auto insurance policy. This type of insurance offers compensation when there is a significant decline in the value of your car after an accident, or it is declared totaled.
Drivers purchase gap insurance to protect them when their auto insurance policy fails to cover the sudden change in value after a car accident. This coverage is extra from your typical insurance.
It is an additional monthly premium and is expected to be a benefit when the victim files a compensation claim.
In the aftermath of a crash, the car’s owner is likely:
- Without a vehicle but still liable for the open balance with their lender.
- Unable to sell or trade in their car easily or for anywhere near what they would before the accident.
While gap insurance is excellent, not all insurance companies are willing to cough up the right amount when an accident causes a significant loss of value in your vehicle. The situation becomes grim when victims realize their car is a total loss.
Seek Maximum Value for Your Gap Claim With an Attorney’s Help
Insurance companies are notorious for offering lowball settlements when they come face-to-face with a claim. Unfortunately, with gap insurance claims, they are no different.
Victims of car accidents with gap insurance jump through hoops only to receive the lowest possible settlement amount or pressure from the insurance to settle for less. Facing this pressure from insurance companies on your own not only delays your coordination to buy a new car but also exacerbates the stress of the situation.
But when you work with a dedicated Bridgeport personal injury lawyer and expert in handling gap insurance claims, you can expect the guidance and strategy to be geared only toward what’s in the best interest of your claim. Your attorney will make sure:
- To meet any deadlines required by Connecticut law and your insurance company
- Gather and review evidence as needed
- Assist in securing and receiving an accurate car valuation report
- Handle all communications and negotiations with your gap insurance provider
Choosing to hire a gap insurance attorney will guarantee that someone is on your side and looking at the best interest of your case.
Understanding the Purpose of Gap Insurance
Gap insurance is a separate car insurance policy that pays for the gap in value of your vehicle from before to after an accident. Essentially, it is an asset protection if a total loss leaves you owing more than it is worth.
Understanding Limits in Gap Insurance Policies
Your gap insurance policy may cover less than what you were expecting. Some insurance provider policies will only cover a portion of the vehicle’s actual value.
So, if you owe more than that amount on your loan, you will seek additional payout if you have a diminished in-value policy.
In addition, if your car was severely damaged but was not declared a complete loss, your gap insurance policy wouldn’t pay either. A car is declared a total loss if the repair cost exceeds the car’s total value.
Do I Need Gap Insurance?
Gap insurance is not typically part of a standard car insurance policy and costs extra. However, if the policyholder can afford the difference in premiums, they should consider purchasing this additional benefit.
Gap insurance is most beneficial to car owners who still have an active loan on the car. The gap insurance policy will cover any owed amounts to your lender.
The following scenarios call for gap insurance:
- A new car lease
- Buying a car that depreciates quickly, like a sports carsportscar or luxury vehicle
- Buying a vehicle with less than a 20% down paymentdownpayment and financing the remainder
- Financing a new car with a loan schedule of 60 months or longer
- Rolling the balance of your old car to the new one
- When your lender requires it
Gap Insurance Coverages
Cars are known to be a depreciating asset, with some models losing value much faster than others. In fact, there will likely be a point while you own or lease your car where it will be worth less than what you owe.
Unlike other car insurance policies, gap insurance does not cover liability, uninsured motorist, comprehensive or collision, or personal injury liability. It covers the difference between your car’s current value and what it would be worth if you were in an accident.
If you do not carry gap insurance or are involved in a car accident totaling your car, you will owe the remaining balance on your loan.
Gap Insurance Steps in if Your Car Was Stolen
Losing your car because of theft is another way gap insurance steps in. Although you will start by filing a claim with your current auto insurance, gap insurance steps in to help recover losses and minimize out-of-pocket expenses associated with the lost car.
Common Insurance Disputes
Like your standard auto insurance policy, when you file a claim, there is a chance that the insurance company will try to give you less than you are owed. In many cases, they respond with a lowball offer or nothing to help offset damages from the accident (or theft) that led to the car’s loss in value.
However, lowball offers are not the only issues that come up during negotiations.
Gap insurance comes in handy when it works but also presents significant legal issues, disputes, and overall concerns. Unlike other forms of insurance, gap insurance is not subject to local or federal regulation — which is how dealerships sell insurance even though they are not licensed insurance agents.
The lack of regulation poses the dissolution of accountability and the placement of some vehicle drivers in a vulnerable position in the wake of an accident.
In addition, the lack of regulation permits price-gouging practices. Customers look to buy gap insurance when it’s available in their dealerships to expedite the financing process. These are the common gap insurance issues seen today:
- Fraud
- Appraisal disputes
- Using vague or misleading language
- Insufficient instruction to claim
Gap Insurance Fraud
Even if the gap insurance industry lacks regulation, committing fraud is still a crime. Fraud may happen when the vendor fails to disclose all the insurance terms, withholds necessary information, or presents fraudulent loan information to the consumer.
Valuation Disputes
Disputes happen during claims; that’s why both parties negotiate. But when there is a dispute in the car’s value, it can present elongated and complicated negotiations that may result in the owner or lessee of the car owing money to their lender.
Vague Language
Before signing a contract, it’s wise to understand the terms and conditions. However, sometimes, these terms and conditions are not presented in a way that is easy or clear for the reader to comprehend, leading to misunderstanding and a trap if something were to happen.
Vague language is intended to be confusing, convincing the buyer to sign when they ordinarily wouldn’t otherwise.
Insufficient Instruction to Claim
Part of having insurance is knowing what to do if you need to file a claim. The instructions should be easy to access and clear.
Yet, this is not always the case. Some gap insurance providers fail to provide any forms of instruction outright — or poorly written instructions — to make it difficult for someone to file a claim.
How Are Gap Insurance Claims Typically Resolved
As much as both parties are forthcoming to negotiate fairly for compensation, this is not always the case. Enough cases result in some kind of legal action, more likely because there was some kind of fraud committed that, in turn, cost the victim a substantial amount of money.
Gap insurance lawsuits may provide payment for damages from the insurance company that should cover the change in the value of your car and anything you owe on the loan.
Hire a Local and Trusted Bridgeport Gap Insurance Law Firm
Realizing you do not have enough coverage when your car is totaled in an accident typically happens too late. But with gap insurance, you can offset these losses.
Even if you have to go back and forth and possibly go to court, the benefits may outweigh the risks.
When you choose to work with a gap insurance law firm, you choose to work with a team that has seen many cases like yours. With decades of experience, the Bert McDowell Injury Law team is ready to review your case and try to help you.
Give us a call today at (203) 590-9169 to schedule your initial case review. You may also reach us online through our online form.
(203) 690-1030
