Being a Miami car accident attorney I see the same issues come up again and again. One of these is issues is guaranteed auto protection (GAP) coverage. In some of my previous blogs I mentioned the need to buy this sort of coverage. I have also mentioned the need to buy collision insurance and underinsured/uninsured motorist (UM) coverage.
GAP coverage covers the difference of the value of your vehicle at the time of the accident and the date of purchase. For example, you may buy a brand new car for $30,000, but at the time of the accident the vehicle is only worth $20,000. The insurance company covering the property damage will only cover the $20,000. This means that you would owe the bank some $10,000. In essence you would have to pay for a vehicle you no longer have access to. The gap insurance should also cover any deductible that may apply. Note that you do not purchase your GAP insurance through a regular carrier like Geico or Statefarm in Florida. Gap should be bought at the dealership at the time you buy or lease your vehicle.
Most accidents do not result in total loss. Meaning that it is more expensive to fix the vehicle than to buy a new one. That does not mean that you should not consider GAP insurance. For example, Florida is a state which is frequented by hurricanes and tropical storms. So there is a good chance that such a storm could cause a total loss of your vehicle. There is also the chance that a vehicle could be stolen or that an impact is so great that the vehicle could not be fixed.
Please note that with some luxury vehicles Gap insurance may not be offered. If you are going to spend an exorbitant amount on your dream car make sure that GAP is offered. You don’t want to be left owing the bank $100,000 or more if you have an accident once you leave the car lot. Also note, that most insurance companies have a cap on collision coverage. So it could be that you buy $150,000 vehicle and you cap on collision coverage is $100,000. Thus, it is very important to check your cap on your collision coverage when you buy a luxury vehicle. You don’t even have to buy a super high end vehicle to be concerned about this. For example, you may buy $30,000 car and your collision cap could be $25,000. This means that if you are in an accident you may end up owing the bank $5,000.
The entire purpose of this blog is to relay that GAP insurance should be purchased if you are buying an expensive or new vehicle. You should make sure to buy GAP insurance before you leave the dealership. Lastly, make sure you look into coverage cap for your collision insurance.
South Florida car accident attorneys are here to assist you 24/7. You can reach an attorney at Goldstraj & Associates by calling 305.764.9907 or 1.888.413.8353.