What is “GAP” Coverage for My Car?
“GAP” stands for Guaranteed Auto Protection Insurance Policy. What it does is make up the difference between what you owe the bank on the car and what the car is actually worth.
Imagine the following example.
You are involved in a head-on car collision in Provo Canyon. You are severely hurt, can’t walk, work or pay your monthly car payment.
You bought your car for $20,000, but you only owe $15,000 on the car. The lender bank is holding the title until you pay it off. Due to the nature of cars, and in combination with high interest car loans, your car has devalued and is not worth $15,000. Instead, the fair market value of your car is only worth $10,000.
The insurance company of the at-fault driver who hit you will only pay you the $10,000 fair market value of your car. As a result, you have a $5,000 gap between what you owe on the car ($15,000) and what the car is worth ($10,000).
GAP insurance in this situation kicks in to pay the difference, or the gap, between what the insurance company will pay you for the totaled car and what you owe the bank.
Your Provo car accident attorney should help you with the property damage aspects of your car accident case, along with the personal injury side of your insurance claim.
Call car accident attorney Jacob S. Gunter for a free consultation at (801) 373-6345.