A frequent question that gets raised by clients injured in car accidents is why the auto insurance is not covering the value of what they are paying for their car. They have found themselves in the position where they have an uncovered balance on their liens after they receive their checks from the insurance companies for their wrecked car.
For example, if you have taken out a $15,000 loan to pay for your car and the insurance company pays you $12,000, which is the value of your car, you are left with a $3,000 gap between the $12,000 they are willing to pay you for the value of your car and the $15,000 loan that you had for the car.
That is where that gap comes into the picture. That is the difference between what the car is worth and how much you paid for it. If you do not have gap insurance, you are going to lose that difference and will have to eat that cost.
So, that is an important consideration when you are buying a new car, especially if there is a difference between the value of the car and the loan you took, that you get gap insurance on it.
If you have any questions, call or text the car accident lawyers at 612-INJURED at (612) 465-8733 for a free consultation.
