What Insurance Companies & Banks Don’t Tell You....And Why It Can Cost You A Fortune

If you're involved in a serious accident and your vehicle is totaled, how much money are you going to owe?

The average is just under $6,800!

Can You Get Gap Insurance In Your State?

Check This List To Find Out If GAP Insurance Is Offered

Alabama Gap Insurance - No

Alaska Gap Insurance - Yes

Arizona Gap Insurance - Yes

Arkansas Gap Insurance - Yes

California Gap Insurance - Yes

Colorado Gap Insurance - Yes

Connecticut Gap Insurance - No

Delaware Gap Insurance - Yes

District of Columbia - No

Florida Gap Insurance - Yes

Georgia Gap Insurance - Yes

Hawaii Gap Insurance - Yes

Idaho Gap Insurance - Yes

Illinois Gap Insurance - Yes

Indiana Gap Insurance - Yes

Iowa Gap Insurance - Yes

Kansas Gap Insurance - Yes

Kentucky Gap Insurance - Yes

Louisiana Gap Insurance - No

Maine Gap Insurance - No

Maryland Gap Insurance - Yes

Massachusetts Gap Insurance - Yes

Michigan Gap Insurance - Yes

Minnesota Gap Insurance - Yes

Mississippi Gap Insurance - Yes

Missouri Gap Insurance - Yes

Montana Gap Insurance - Yes

Nebraska Gap Insurance - Yes

Nevada Gap Insurance - Yes

New Hampshire Gap Insurance - No

New Jersey Gap Insurance - Yes

New Mexico Gap Insurance - No

New York Gap Insurance - No

North Carolina Gap Insurance - Yes

North Dakota Gap Insurance - Yes

Ohio Gap Insurance - Yes

Oklahoma Gap Insurance - Yes

Oregon Gap Insurance - Yes

Pennsylvania Gap Insurance - Yes

Rhode Island Gap Insurance - Yes

South Carolina Gap Insurance - Yes

South Dakota Gap Insurance - Yes

Tennessee Gap Insurance - Yes

Texas Gap Insurance - Yes

Utah Gap Insurance - Yes

Vermont Gap Insurance - Yes

Virginia Gap Insurance - No

Washington Gap Insurance - No

West Virginia Gap Insurance - Yes

Wisconsin Gap Insurance - Yes

Wyoming Gap Insurance - Yes

Scenario #1 - Ready To Purchase A Vehicle or, Purchased Less Than 12 Months Ago & Still Owe On It - Go Here to see your Gap Insurance Options Scenario #2 - Purchased, or Plan to Purchase a New or Used Vehicle and Gap Insurance is Not Available in your State - Go Here to see your Gap Insurance Options Scenario #3 - Don't qualify for any Coverage - Go Here to see your Gap Insurance Options

Did you happen to see the remains of an auto accident when you were driving around town recently?  Did you slow down to have a look.  I bet you did.  It's almost a natural reflex.

I saw one recently - it looked like a newer Chevy Venture® Mini-Van just absolutely crushed....with bits and pieces of it scattered all over the road.

Heck, most of us see a car accident weekly - some of us daily.  Hopefully, no one gets seriously hurt.  But that car, truck or mini-van you were gawking at looks like a "large accordion" - destined for the scrap yard.

To make matters even worse, this is where the persons involved in the accident learn about the very, very expensive mistake they made....when they first purchased their vehicle.

It's a mistake almost everyone of us make....and one that I hope you never have to experience first-hand.

What You Don't Know....Will Make Your Wallet Scream

Here's how almost 97% of those involved in a serious accident get a very expensive lesson....

Let's use that Chevy Venture I saw on the side of the road.  The owner bought the Mini-van a year ago.  It cost almost $30,000 and she financed all of it.

With Taxes and finance charges added, the total amount she owed to the bank was $34,000.

One year later, she's involved in the accident and her Van is considered a "total loss".  So, the Insurance company begins the process of settling her claim.

Here comes the "lesson!" - Follow along.

She's had the Mini-Van for 1 year - and still owes the Bank more than $31,000.

When the Insurance Company sends out the check it's only for....$23,576.00.


Yep, $23,576.00 - and that's all she's going to get.

You see, the mini-van has depreciated (the value has dropped like a rock) a bunch since she drove-off in it.  No surprise there - it happens to every vehicle sold, no matter what Brand it is.

It's a dirty little secret....and the Insurance Companies and Banks certainly aren't going to tell you this.

The lady in the Mini-Van?  Well, the Insurance Company is only giving her $23,576. She owes the bank $31,000.  That's a $7,424 difference....and the Bank wants their money.

If your car was totaled, what would you owe your Bank?

The Golden Rule - Why You Need To Insure Your Vehicle Like You Insure Your Home

OK - just a few brief explanations of what this is all about...and what you need to consider.  Here's how all this works.

Most folks have Homeowners or Rental insurance.  But for real expensive items, like expensive jewelry, you need to add what's called a "Rider" to your Policy.  The reason - Insurance Companies won't cover those type of items as part of a regular insurance policy.

So, you have to pay an extra $5 or $6 a month to have those items fully covered by the "Rider."  I have one on my Homeowners Insurance for my Wife's Jewelry....and many of you reading this probably do as well.

And if anything ever happens, to the Home or the Jewelry, everything is replaced.  Paid in-full!

However, Car's, Trucks, Mini-vans and SUV's are treated totally different by the Insurance Companies.

If your vehicle is involved in an accident (stolen & flood damaged as well) and your Insurance Company "totals" it, you're in for a nasty surprise.

Almost all Car Insurance Policies have this short clause buried somewhere in all that legalese -

"In the event of a total loss, the policy holder will receive the actual cash value of the vehicle, minus any deductible"

Did you catch the 3 very expensive words in that clause?  The 3 words are - "actual cash value."

Actual Cash Value means you're going to get a get a check for....

"What it's worth" - not - "What you owe"

I would say more than 95% of those driving today don't have a clue about this.  Those that do know about this problem have already put a "Rider" on their Car.

A Rider for your car is called GAP Insurance or GAP Protection.  It's just like the Rider for your Home - except it's only for cars, vans, trucks or SUV's.

It covers What You Owe - not - What it's worth.

It doesn't matter what the reason is - if it's ever totaled due to theft, fire, accident, flood, tornado, vandalism, hurricane, or even gets stolen - it's covered - and paid-in-full!

How To Cover Your "Arse"

The options available to you depend on what your particular situation is.  Here are 3 scenarios - which one applies to you?

Scenario #1 - Ready To Purchase A Vehicle or Purchased Less Than 12 Months Ago & Still Owe On It
Scenario #2 - Purchased, or Plan to Purchase a New or Used Vehicle and Gap Insurance is Not Available in your State - Go Here
Scenario #3 - Don't qualify for any Coverage - Go Here

Scenario 1 - Getting Ready To Purchase A Vehicle or Purchased Less Than 12 Months Ago

If you're getting ready to purchase a new orusedIf you're planning on a retail purchase (at a Dealership) of a used car,truck,van or suv, and not putting at least 20% down, you certainly should be looking at Gap Insurance. As soon as you drive off the lot, it's worth $3,000 - $5,000 less. vehicle, there are 4 ways to avoid losing a ton of money.

  1. Put at least 20%-30% down on any purchase;
  2. Purchase a "Rider" - AKA GAP Insurance from your Car Insurance Company or Bank;
  3. Purchase Gap Insurance from another Insurance Company;
  4. Buy Gap Insurance from the Dealership you're buying at.

Let's take a look at each.  Putting 20% - 30% down is probably the smartest way to take care of it - you automatically wipe-out the typical 30% 1st year depreciation.  But with the average price of a new car at almost $26,000, coming-up with a $7,800 down-payment can be tough.

Purchasing a "Rider" or GAP from your Insurance Company or Bank is probably the next best option.  GAP has been around for years - particularly with Leased vehicles. 

But with the huge depreciation on vehicles today, it's becoming more popular with regular bank financing as well.  Yet, it's not offered by many insurance companies or banks - and that's ridiculous since GAP would protect their customers from possible financial ruin.

If your Insurance Company or Bank does offer it, have them explain it.  Make sure you ask if your deductible is waived if the vehicle is totaled.  Also, ask if the coverage provides any money toward a replacement vehicle.

Be careful here....many Insurance Companies & Banks will only provide GAP if you agree to finance the vehicle with them as well.

Getting Gap Insurance from another Insurance Company is also a good choice, although finding a Company that offers it can be a chore.  Two companies that do offer GAP are Lee & Mason Financial Services, Inc. (I've purchased from them twice) and Gap-Insurance.com

Both Gap-Insurance.com and Gap Insurance Loss Protection have been around for years, are owned or backed by large Insurance Companies, and are the only two companies I've ever recommended.  Both offer superb GAP policies that average less than $4.90 a month.  And Gap-Insurance.com even offers an EZ Payment Plan.

And finally, many Dealerships offer Gap coverage as part of the Sale process.  They'll push you very hard to purchase what they sell....and that can a huge turn-off.  Besides, it's expensive - I've seen them sell a Gap Insurance Policy for as much as $8.33 a month.

Scenario 2 - Purchased, Or Plan to Purchase, A New Or Used Vehicle And Gap Insurance Is Not Available In Your State

If you are looking at purchasing a new or used vehicle, and Gap Insurance is not offered in your State, you have to options.

The first would be to check with your car insurance company to see if they offer any programs to cover the GAP you have.

The second option would be Gap-Insurance.com.  They are the only Company (that I know of) in the U.S. that will pay the difference up to $5000 between the original purchase price of the vehicle, and the actual cash value of your vehicle at the time of the total loss.

Since there are a handful of States that don't allow "Gap Insurance" to be offered, every State in the U.S. (except California) does allow "Total Loss" policies to be written.  With this type of Policy, the only restriction is this - you have to have purchased your vehicle within the last 6 months..

To find out more, visit Gap-Insurance.com, click on the "Click To Order" button, then choose your State from the drop-down menu.

Total Loss Coverage will be highlighted just below the middle of the page.

They've been around a long time and are the only U.S. Company to help those that have folks with a vehicle that doesn't qualify for traditional gap insurance.  Total Loss Coverage from Gap-Insurance.com will average about $4.90 a month....and they offer an EZ Payment Plan.

Scenario 3 - Don't Qualify For Any Coverage

If you don't qualify for any coverage, you have three options.

  1. Call your current Insurance Company and see if they can help;
  2. Call the Bank that has your Loan or Lease and see if they can help;
  3. Call Progressive.com to see if they can help

Go ahead and pick-up the phone today and call your agent or insurance company.  Ask them what they pay if your vehicle is considered a total loss.

With your current policy, will they pay the entire amount owed to the bank if your vehicle is wrecked and considered a "total loss"?

If they do not, what policy changes can be made to cover it all.  If you get lucky and they'll make a change, ask what it covers - exactly - and what does it cost.  Make sure you take good notes.  Whether they can help or not, move on to #2.

Ask the Bank that has your lease or loan if they offer Gap Insurance and can it be added to the Loan.  If it can, good for you.  Take good notes and find out what it covers and what it costs.

And lastly, try
Progressive.com - they offer GAP insurance as an add-on to their regular car insurance - all you have to do is ask about to see if they offer it in your State.

After you've gathered your information, and you have an option or two, just choose which coverage fits your needs the best

P.S. - A quick update on the value of GAP Insurance....

I have a neighbor down the street - a young, single female who works in the IT area for a large Local Company.  She purchased a 2004 Mid-Size SUV - a Japanese Brand - but not a Honda or a Toyota.

Her total amount financed was $35,137.45.

Late in 2005, she was involved in a serious accident.  She wasn't hurt badly yet the Insurance Company totaled her SUV.

The Value the Insurance Company placed on the SUV was $19,897.00. That was the amount of the check she was going to get

On the day she wrecked the SUV, she still owed $31,197.54.

If my math is correct, she owed the Bank the difference - $11,300.54.

Would you have that much money available to pay the Bank?  Not many do.

GAP Insurance is a sensible and cost-effective option to protect yourself from financial ruin.

By the way - my neighbor - she didn't lose any sleep.  She had GAP Insurance.

I do have an obligation to point out that not all Car Makers, Dealers, Salespeople, Insurance Companies and Banks are greedy or crooked.  This site is dedicated to honest Companies and their Professional Employees who've grown weary of the ignorant and classless giving the automotive related industry a black eye......a black eye that I feel is very close to being permanent.

By using these new and used car guides, I hope to be able to help you find the Best Businesses, and the Professionals that represent them, with very little effort on your part and help you....

Save More Money and More Time Than You Ever Have Before.

It is also my hope that these Companies and the Professionals that represent them will have more business than they can handle - a reward they justly deserve.

Thank you for visiting My New Car Purchase - and please take 5 seconds to or perhaps let a friend or relative know about us - Click here to send this page to a friend.

I guarantee that you will have an exceptional experience the next time you buy a car, van, truck or SUV - again, thank you for visiting this Web Site!

Tom O'Leary  - "A Concerned Dad....and Automotive Analyst"

New Car Purchase - Exceptional New Car Purchase Advice and Automobile Purchase Strategies for your next new car or used automobile purchase.

Feel free to e-mail me at: Tom at my new car purchase (no spaces) dot com - or take a few seconds to send a question or comment by Clicking here

P.S. Make sure you check out the My New Car Purchase Blog.

To see specific information on how to have the best new car purchase you've ever had, click on the My New Car Purchase links listed below.

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