Galfand Berger Auto Accident Lawyer: You Need “GAP” (Guaranteed Auto Protection) Insurance Even If Your Car Accident Is Not Your Fault December 18, 2012
Many people who are in an auto crash and are injured due to the fault of another driver may find they are still required to pay the remaining balance of their auto loan or lease even if their car was totaled.
It may be hard to imagine that while you are recovering from the injuries suffered in an auto accident that the at fault driver’s auto insurance company may only be required to pay the cash value of your car and not the remaining balance on your auto loan or lease agreement. Even if you file an auto accident lawsuit you may be only able to recover the cash value of your car from the at fault driver.
Your remaining loan or lease balance creates a “GAP” that could have been prevented with the purchase of “GAP” (Guaranteed Auto Protection) insurance.
Automobile insurance is designed to pay the current cash value not the current loan or lease balance if your vehicle is stolen or totaled in an car accident or by severe weather.
If you are in a car crash or your vehicle is stolen or considered a total loss you are still responsible to pay the remaining loan or lease balance. A vehicle is generally considered “totaled” if the cost to repair the vehicle exceeds a certain percentage of the vehicle’s cash value. “GAP” insurance pays the difference between the cash value and loan or lease balance owed.
Types of Losses Typically Covered by “GAP” Insurance
Causes of a “GAP” Between Cash value of Your Vehicle and the Lease or Loan Balance
You can predict if there will be a gap in coverage by examining how you purchased or leased your vehicle. If one or more of the following is true you need “GAP” insurance:
- Do you have an auto loan and made a small down payment?
- Was your down payment less than 20%?
- Did you finance your vehicle for 60 months or more?
- Is the vehicle you purchased or leased likely to depreciate quickly?
- Do you drive an excessive number of miles each year?
- Did you include any unpaid loan or lease balance from a vehicle that you traded to purchase or lease your new vehicle?
If one or more of the above conditions is true you need “GAP” insurance.
Purchasing “GAP” Insurance for a Vehicle Already Leased or Financed
It is possible to get “GAP” coverage after you drive your vehicle away from the dealership. Prices for this coverage can vary widely so it is important to do your homework and check many insurance companies to make sure you are getting the best possible rate.
Call the Philadelphia Automobile Collision Lawyers at Galfand Berger
If you or someone you love has suffered injuries in an auto accident, we encourage you to contact our automobile accident lawyers at the law firm of Galfand Berger. Our attorneys will fully examine the details of your case to determine whether you have a valid claim against the person who caused the collision. Our offices are conveniently located in Philadelphia, Reading and Bethlehem, Pennsylvania. We represent clients throughout the Philadelphia-South Jersey region, including Allentown, Harrisburg, Montgomery County, Delaware County, Bucks County, and Chester County in Pennsylvania, and Camden County, Burlington County, Gloucester County, Cherry Hill, Moorestown, Mt. Holly and Mt. Laurel in New Jersey. Contact the automobile accident attorneys at Galfand Berger at 1-800-222-USWA (8792) to schedule a free and confidential consultation or submit a free online inquiry.