When you’ve made the investment of financing a car, there’s a lot on the line. First, you have a shiny new car–congratulations– but you also have a car payment, and in some cases, a higher insurance payment. Even with the best insurance, it doesn’t always cover the total cost of the car. Rather than imagining the terrible feeling of owing money on a car that has been totaled or stolen, people often opt for gap insurance in addition to their traditional insurance coverage to cover potential losses. If you’re considering gap insurance, it’s important to understand how that can impact your insurance claim after an accident.
What Exactly is Gap Insurance?
The financial implications in personal injury cases go beyond medical expenses and lost wages. When your car is totaled in an accident (also known as a total loss), typically, an insurance company will only reimburse the actual cash value (ACV) of a vehicle at the time of the accident. This leaves the remaining loan amount unpaid and, as a result: you without a car. This is where gap insurance can come in handy. It covers the cost of your car between the ACV and the loan amount. This way, you can sometimes wipe the slate clean and try again with a different car after your settlement comes through.
The Role of Gap Insurance in Personal Injury Claims
After a collision, it’s important to follow the essential steps to maximize the payout for your claim. Although gap insurance does not directly handle personal injury claims, it’s important to understand that it can still impact the claims process. As we’ve learned in the past, insurance companies tend to minimize damages in order to pay out less for various claims. It’s their business model, and it works for them, but that’s why you have That Lawyer in your corner.
In the event of a total loss collision, your insurance company may attempt to use your gap insurance as an excuse to pay less than they owe. Since gap insurance doesn’t cover personal injury claims, traditional insurance companies don’t get off the hook that easily. Both claims go through different processes and sometimes have different requirements. Typically, your attorney will have little to do with your gap insurance claim.
How Can My Lawyer Help?
As an add-on service, gap insurance is usually processed through your lender. People tend to go with the lender that offers them the lowest interest rate, and the most desirable monthly payment, but they will play a big role when utilizing your gap insurance. That means that it’s important to carefully review lenders and resist the temptation to go with the cheapest option, if possible. Although your attorney won’t be heavily involved in working with your gap insurance claim, the work that they do for your personal injury protection (PIP) or comprehensive coverage insurance will aid your gap insurance efforts.
If your gap insurance claim is taking longer than expected, you can rest assured that your attorney is working diligently to make sure you get paid the highest amount possible to cover your medical bills, property damage, and any pain and suffering you may have. In fact, in some cases, if your vehicle getting totaled in an accident means that you’re unable to get to your job, that amount of lost wages could add to the total you’re owed in your claim. When you’re enjoying your new car, the last thing you want to concern yourself with is what happens in a–hopefully– hypothetical situation, but it’s still important to know how all types of insurance impact your life and property. Whether an accident causes a minor ding, or totals your car, your attorney has your back, and can clarify how far insurance can go to cover your expenses. If you have questions or need assistance with your personal injury claim, call our office at 850-977-3229 today.
The Law Office of Attorney Ashley M. Armstrong, PLLC
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