Monday, February 10, 2014

What's GAP insurance?

I get this question all the time.  People know me as an insurance agent so when they have a question about insurance I'm the guy they call.  I'm glad the do that!

First, I don't sell GAP insurance.  Gap insurance is normally something that is offered at the car dealer when you finance you car.  It helps you in the situation when you have your car totaled in an accident and you owe more on your car than it is worth.  Say you owe 18,000 on your 2012 Nissan and the car is worth 15,000, in that case you might have to come out of pocket 3,000 to pay off your loan once the insurance company settles your loss.  This could happen if you are at fault in the accident or the other person is at fault.

So who needs GAP?  Well if you have financed a large percentage of your car purchase you might need it.  If you didn't finance it you don't need it.

What can I do for you?  I think I have a better option, if you have purchased a new car many of my companies offer a coverage called Repair or Replacement.  What that means, if your car is involved in an accident the company guarantees that they will repair your car or buy you a new one.   Let's go to the above example-if your 2012 Nissan is totaled and you have that problem with owing more than the car is worth. If you have Repair & Replacement coverage, NO WORRIES!  The company is going to buy you a new current year car like the one that you wrecked.  They will contact your finance company and do what is called a collateral swap so now you still owe $18 ,000 but now it's on new Nissan not your old one!

Another plus with this coverage, you can still purchase this if you haven't financed your car.

One important thing to note, you need to purchase this coverage when you purchase the car. You can't buy it once you need it. It's one of those horse is out of the barn things.

If you are interested in this then give me a call at 252 756 5200 or contact us on the web at it!