First of all, what is gap insurance? Gap insurance generally pays for the difference between the value of your car and the amount owing on your car, when you car is declared a total loss in the event of an accident or theft of the car. In other words, it is insurance that covers you when you are “upside down” on your car and the car is totaled out. This sort of insurance is more there to protect the lender on your car, although it obviously protects you as well in this situation. Lenders (the bank or company loaning you money to buy the car) want you to have this insurance, so if your car is badly damaged to the point that it has to be totaled out, between the car insurance and the gap insurance, they will be paid in full. If someone puts a large down payment on a car or purchases a car for below fair market value, then generally someone would not need gap insurance. But many people do not get great deals when they buy a car or they have poor credit and are unable to put a large down payment, so the car is depreciating quicker than they are paying down the loan and thus the gap insurance is necessary. So gap insurance is generally needed when your finance company requires you to purchase same or if you want to protect yourself from the situation where your car is unable to be repaired after an accident and the amount of money that you owe on the car is greater than the fair market value of the car at the time of the loss.
When this law firm is representing you for a car accident, it will help you get your car fixed, totaled out and help get you in a rental car and deal with all of these issues, including dealing with you gap insurance. Please call the law firm today for a free consultation. Drucker Law Offices has offices in Boca Raton (principal office), Coral Springs, Miami, Boynton Beach, Lake Worth and West Palm Beach. The phone numbers are 561-483-9199 in Palm Beach County or 954-755-2120 in Broward County or 305-981-1561 in Miami-Dade County.
It is important to note that every case is unique and should be judged based on the specific facts of the case. The advice in this blog is intended to be general in nature and should not to be construed as specific advice for a case, as a minor difference in the facts of the case could change the result. Also, this blog is, as the web site suggests, based on Florida law and the laws of any other states or even another country could vary from Florida.
