[Paulie]

I have a question...
A coworker has a new car, full coverage and gap insurance. Car went off the road, into a ditch and is now being totaled by the ins comp...

Car: $14000 (Loan Amount)
Insurance will pay: $10100 (Value)
Difference is: $3900
Gap is willing to pay 25% of value: $2525
So she owes the loan company: $1675

Now maybe I am wrong, but I thought the purpose of gap insurance was to cover the GAP between what you owe and what it's actual value was. Am I wrong here or is something not right?

I was thinking about getting gap insurance for my bike... but if they are only going to pay 25%, it hardly seems worth it to pay the premium.

 

[jbswear]

25% of $3900 is only $975. They are paying 75% of the cost.

Why ask us? Read the fine print in the contract. Never assume anything.

 

[wdieck]

I used gap to pay my losses last year...never heard of that 25% crap. Sounds like she got bad gap ins.

 

[NextSV]

You gotta read the fine print on gap and ANY other insurance, they will keep as much money as they can. Check with your insurance company too. Allstate offers their own form of Gap at a very reasonable price. Your friend may (MAY) have an argument with the company that sold her the gap insurance. My guess is they sold it (explained it) as a blanket insurance that would cover her in the event of loss. If she is buying from the same dealer then she may be able to get them to help out on a new car. ALSO, I would go back to insurance and the gap ins. company and fight it out a bit

 

[tcl]

Deductible.

 

[GUN]

25% of $3900 is only $975. They are paying 75% of the cost.

Why ask us? Read the fine print in the contract. Never assume anything.

25% of the value of the car, not 25% of the remainder owed. But you are right, never assume anything... sometimes those shady companies can try to get one over on you... I would not be the least bit surprised.