Gap insurance

[Psullivan]

I recently took delivery of my Sig performance and am a happy camper. One day while driving along I started wondering what would happen if the car was in an accident? Even if my insurance repaired it to "good as new" the car would be tagged as having been in an accident which I have to believe would greatly reduce the resell value for good. Is there some way to insure or protect myself from that besides locking the car in the garage for good?

Thanks,

Pat

 

[Rodolfo Paiz]

I don't know of any way to insure against that particular risk. As best I can see, that's a risk you always run, in any car, and it's all yours. Maybe others know something I don't.

Traditionally, "gap insurance" refers to a particular insurance product which will protect you in case your car is declared a total loss in an accident, or is stolen, or is otherwise rendered out of service permanently, and the insurance payout you receive from the accident or theft is less than the outstanding balance on your auto loan. So, if you total the car and receive $50K from the insurance company, but you owed $70K on your loan, gap insurance exists for that remaining $20K to pay off your auto loan.

 

[digitaltim]

You can attempt to make a "diminished value" claim with your insurance company. I successfully did this with State Farm when my new BMW was rear ended.

 

[Bradleybang]

Rodolfo, you explained Gap insurance correctly.

Psullivan,

Your insurance policy would not cover you should you cause the damage. No insurance I know would cover first party damage for diminished value. I believe a couple companies do sell policies that will replace a car with new, if totalled in first couple of years.

I have, one time, seen an occurence of insurance for the diminished value. One of my insureds hit a high valued collector Ferrari. The Ferrari owner sued for repair, loss of use and diminished value. The insurance company did pay for repair. Settled for an amount for the diminished value and loss of use but not for complete amount that Ferrari owner demanded.

 

[GDH]

GAP insurance is always good to have for at least the first year.

 

[digitaltim]

@Bradleybang Agreed - mine was against the other side that caused the accident to my vehicle that was less than 3 months old.

 

[Zextraterrestrial]

GAP insurance is always good to have for at least the first year.

except I mentioned to my financier that the price of the car will be $6k more as of Jan 1 so I should be ok, right?
he seemed to agree, but maybe he was just drooling and thinking about my car because he couldn't say enough about how awesome they are!
He said ' that is an awesome purchase!' and even stopped to tell my wife that separately too