Hit and Run Update
My car was involved in a hit and run, and unfortunately, I have no details about the driver. I still owe $15,000 on the car, but its current value is only around $4,000 to $5,000. I have full coverage insurance and gap protection. If the car is declared a total loss, will I be responsible for any out-of-pocket expenses?
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I’m sorry to hear about your situation. Since you have full coverage insurance and a gap insurance policy, here’s how it typically works:
Collision Coverage: Your full coverage should cover the damage to your vehicle, minus your deductible. If your car is deemed a total loss, the insurance company will assess its market value (which you mentioned is around $4-5k).
Gap Insurance: Since you owe more on your car than its current market value, gap insurance is designed to cover this difference. After your collision coverage pays out the market value of the car, your gap insurance should cover the remaining balance on your loan.
In summary, if your car is totaled, your collision insurance should pay out the market value, and the gap insurance should cover any remaining amount owed on your loan, meaning you should not have to pay anything out of pocket. However, be sure to review your individual policies and consult with your insurance agent for specific details about your coverage and any potential deductibles.