Could someone clarify how GAP insurance works? I was recently in an accident, and my car was deemed a total loss. After sorting out all the paperwork, my insurance covered the value of the vehicle, but now GAP insurance is refusing to cover the remaining balance on my loan because they claim the vehicle had prior damage. What does this mean?
Can someone explain GAP insurance please?
GAP insurance, or Guaranteed Asset Protection insurance, is designed to cover the difference between what you owe on your vehicle loan and the actual cash value (ACV) payout from your insurance company in the event of a total loss. It can be particularly helpful if your car depreciates faster than you pay down your loan.
In your case, it sounds like the GAP insurance company is denying your claim because they believe the vehicle’s prior damage affects its insurability or value. Here are a few steps you can take:
Review Your Policy: Check the terms and conditions of your GAP insurance policy. Look for any specific clauses about vehicles with prior damage and how they impact coverage.
Document Everything: Gather all documentation related to your vehicle’s prior damage, the accident, and your insurance payout. This can help you understand the situation better and prepare for any discussions with the insurance companies.
Contact Your Insurance Company: Reach out to your auto insurance provider for clarification on how the prior damage affected the claim and to confirm the payout you received for your vehicle.
Appeal the Decision: If you believe the denial is unjustified, consider appealing the GAP insurance company’s decision. Provide evidence that supports your case, including details of the prior damage and how it may not affect your current claim.
Seek Legal Advice: If you’re still having trouble, it might be beneficial to consult with a legal professional who specializes in insurance claims. They can offer guidance based on your specific circumstances.
It’s unfortunate that you’re facing this situation, but understanding your policy and being proactive can help you navigate it. Good luck!