You’ve just survived a serious car accident, but your vehicle is a total loss. Then, your insurance company tells you that your claim won’t cover what you still owe on your auto loan. Now, you are left facing thousands of dollars in debt for a car you can no longer drive. This scenario plays out for countless drivers every year, but there is a financial safety net that can help after a serious car wreck: gap insurance. Make sure to speak with an experienced car accident lawyer in McAllen.
What Is Gap Insurance and How Does It Work?
Gap insurance—which stands for “guaranteed asset protection”—covers the difference between your vehicle’s actual cash value and the remaining balance on your auto loan or lease. Standard auto insurance policies pay out based on what your car is worth at the time of an accident, not what you paid for it or what you still owe.
Because vehicles depreciate the moment you drive them off the lot, this creates a financial gap that can leave you on the hook for thousands of dollars. Gap insurance helps bridge that divide by paying off the remaining balance. As a result, you’re not stuck making payments on a car that no longer exists.
Situations Where Gap Insurance Provides Critical Coverage
Some drivers benefit more from gap insurance than others. Generally, this coverage helps anyone who owes more than their vehicle’s actual cash value. You should invest in gap insurance if:
- You lease your vehicle
- Your vehicle has accumulated high mileage
- You made a small down payment on your auto loan
- You paid more than your car’s actual value at purchase
- Your vehicle has depreciated significantly since you bought it
It’s also important to note that gap insurance has limitations. In most cases, this coverage won’t pay for your deductible, stolen or repossessed vehicles, down payments on replacement vehicles, extended warranties, or rental car fees. An attorney can evaluate the terms of your policy and determine the compensation you can recover.
How to File a Gap Insurance Claim After an Accident
You can pursue a gap insurance claim if your policy is active at the time of the accident. To initiate the process, you will need to notify both your primary auto insurer and your gap insurance provider after the collision. An attorney can help you prepare for negotiations with insurance adjusters and gather the documentation required to support your claim. Additionally, your lawyer will handle all communications with these insurance companies so that you do not accidentally say something that could be used to undervalue your vehicle or delay your payout.
Speak with an Attorney About Maximizing Your Accident Recovery
Gap insurance can help resolve the disparity between what you owe and the value of your totaled vehicle. However, your damages may extend far beyond these losses. Medical expenses, lost wages, pain and suffering, and a long road to recovery often follow a serious wreck.
A Mcallen injury lawyer knows how to identify all potential sources of compensation so that you are not left paying for someone else’s negligence. From gap insurance to personal injury lawsuits, an experienced attorney will pursue every avenue available to you. Schedule a free legal consultation to discuss your case and learn what your claim may actually be worth.
