My gf recently totaled her car, she was 100% at fault.
She has GAP insurance, and full coverage. She originally paid $12k for her car, and still has $10k left to pay.
Her insurance company is paying out $7500 directly to the credit union towards the remainder of the balance of what she owes.
We are both new to this, so sorry for poor wording or any confusing, and I suppose my question is this: if she has gap insurance is that the only thing will pay towards the balance of the car, and will her having full coverage replace the car she totaled? Or will that go towards the remaining balance as well?
GF totaled her car, have some questions hopefully this sub can help with
byu/km1697369 inInsurance
Posted by km1697369
5 Comments
Sorry to hear about the accident! Here’s how it typically works in your situation:
1. **GAP Insurance**: GAP (Guaranteed Asset Protection) insurance covers the difference between what the car is worth and what your girlfriend still owes on it. In this case, if the insurance payout is $7,500 and she owes $10,000, the GAP insurance should cover the remaining $2,500. This way, she won’t owe anything to the credit union after the payout and the GAP insurance kicks in.
2. **Full Coverage**: Full coverage insurance includes both liability and physical damage coverage (collision and comprehensive). When a car is totaled, full coverage generally pays out the **actual cash value (ACV)** of the car, which is what happened here with the $7,500 payout. Unfortunately, full coverage doesn’t usually replace a totaled car unless your policy has additional options like **new car replacement** coverage.
So, in this case:
– Full coverage pays the $7,500 towards the loan.
– GAP insurance covers the remaining $2,500 to pay off the loan.
– If your girlfriend wants to get a new car, she will need to look into a new loan or other financing options, as full coverage won’t provide her with a replacement vehicle unless she had extra coverage for that.
Make sure to double-check the GAP insurance terms, but that’s usually how it plays out.
She’s not getting a replacement car. Her carrier is paying $7,500 (the actual cash cake if the vehicle) towards the loan and GAP should pay the remaining balance. She won’t receive anything towards a replacement car.
[deleted]
All that will happen is the loan will be paid off. The insurance cuts a check for ACV and GAP handles the amount between that and the loan balance. She will not be given any money.
She needs to read her GAP paperwork to see if there is a cap on the amount they will pay. Best-case scenario is that she walks away with $0 but her loan paid off. Worst-case is that she still owes her lienholder money after the claim settles because she was so under water on the loan.