Why You Might Want to Have Gap Insurance After Your Auto Accident
If you own a vehicle, then you're undoubtedly familiar with auto insurance and how it works. You pay the insurance company a premium each month and in return, they cover the costs of certain related expenses in the event of car accidents or theft. Yet, what many people aren't aware of is that insurance companies only pay what the vehicle is worth at the time of the incident which may not reflect what you still owe on it. That's where gap insurance can come in handy.
What is gap insurance?
Gap insurance stands for "guaranteed asset protection." Essentially, it covers the difference of the value of the vehicle at the time of the incident and how much you still owe on the loan or lease. Gap insurance doesn't relate to the coverage you receive for an auto injury sustained during an accident, which would result in something such as personal injury cases. Having gap insurance can be a big help if you're in an accident, particularly one that isn't your fault, and owe more on the vehicle than it is worth. It can also be beneficial to seek out legal advice in this situation as well.
How can I buy gap insurance?
Gap insurance can typically be purchased in one of three ways. The first method is to add it as an option from your auto insurance company and pay for it in monthly installments. The second option is to get it through the dealer or lender, which would generally be added to your monthly payments. The third option is to find a third-party company that only provides gap insurance and purchase it from them.
Do I need gap insurance?
When you've been in a car accident, it helps to have as much protection as possible. Auto insurance, health insurance, gap insurance, and a reputable car accident attorney are just a few things that you might find useful to have. However, not everyone needs gap insurance. Typically, you would want it if:
- Made a small or no down payment on your vehicle
- Drive frequently which reduces the vehicle's value
- Lease your vehicle
- Your loan is for longer than 48 months
In any case, whether car accident claims or personal injury cases, it's important to have the right people by your side. The most common personal injury cases are motor vehicle accidents, which account for 52%, followed by medical malpractice (15%) and product liability (5%), according to the U.S. Department of Justice. Having the right attorney can ensure you get the compensation and benefits that you deserve.