Posted: Sun Feb 10, 2008 6:21 pm Post subject: my bank says I have
my bank says I have to continue making a payment on a vehicle that was totaled. I carry Gap Insurance. My Auto Insurance company paid off over half the loan. Do I still need to make the payments? _________________ Register Now to have your Insurance queries solved.
My friend, you are required to clear off the money that you owe to the bank no matter what the status of the vehicle. You were wise to take out the GAP policy on it. Now just tell me what to you mean by this.....
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I carry Gap Insurance. My Auto Insurance company paid off over half the loan.
shall I consider that auto policy+gap insurnace, had covered the loan only partially?
Cheers!!
Darla Heins _________________ Register Now to have your Insurance queries solved.
I'm betting (tell if if not true) your carrier paid, minus your deductible (which you still owe) GAP policy paid, but you had some prior unrepaired damage maybe? Please explain what the gap paid and didn't pay for...and we can be of further assistance, but I'm betting they are correct...more info=more help _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
I would have thought that the gap would have kicked in and paid for the difference, but you bring up some really good points Lori. Here comes that investigator out in you, huh, LOL. You always know the right questions to ask, I would have never thought about unrepaired damage or a deductible. You are awesome. Now if the OP will come on and answer truthfully, that would be great.
Most GAP policys don't cover your deductible...nor will they cover prior unrepaired damages....more than likely this is what the OP has left to pay...Good natured if no unrepaired damage, your deductible is all you should have to pay...and I have seen one GAP policy that paid the deductible as well, personally I think they made a mistake, but hey, good for the owner...
ERB, you flatter me! _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
OP, did YOU notify your GAP carrier of the loss? If not, I'm betting they don't even know about the loss. Again, -you- need to contact your GAP carrier to make sure they handle the remaining part of the loan. Also, if they did pay, you can ask them why the paid the amount that they did (i.e. were there certain things they did not pay for, etc).
Another potential to consider is the original amount of the loan. Did the loan on the totalled vehicle also include a loan amount that was not settled and paid off on a prior vehicle?
There are those folks out there that get what's referred to as "backwards," "upside down" or "hoop-teed" in their vehicle. In real language, that's a situation in which you owe more on the car than it's worth. The theory is that your gap insurance should make up the difference between those numbers, with certain limitations. UNLESS...the car that you traded in on the now totalled vehicle was also "backwards" and the lender included the amount that you were upside down in the NEW loan on the NEW car.
For example: the car you owned previously was traded in on this totalled car. You owed $3,000 more than that car was worth, and the dealer included this $3,000 within the financing package on the new car. Let's say that you got into the new car with little or no money down, as you have good credit. Then you wreck the new car. Oooooh- ugly.
Many people are of the opinion that when you total out a car, you should be paid what it would cost you to replace that car. Automobile losses are settled on an "Actual Cash Value" (ACV) basis. For simplicity- consider the ACV the depreciated value. Many cars lose a lot of their value once they're titled and off the car lot. Ask any Dodge car owner that one!
When considering the potential that you have added a previous loan balance to the loan balance on the new car (as described above), you could easily owe more than the combined payments from your primary car insurance and the gap coverage. I see this not uncommonly, and it's not a good situation to be in.
Not only do you have to pay off the loan, it will affect your credit pretty heavily if you don't. Hopefully, this isn't the case, and I hope that tcope is right in that the gap insurer isn't even aware of the loss yet.
Let us know what's up, and we will do our best to help!
Great ins teacher ! I'd forgot about rolling another loan onto the car note...and unfortunately have seen many people do it...this again could explain a 'gap' that his gap carrier didn't pick up. _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
yes...you should be fine, generally gap policys will not cover deductions from the ACV for prior unrepaired damages, loans attached, or sales tax, extended warranties etc, that are attached to the loan... _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
Posted: Tue Feb 12, 2008 5:35 pm :[/b} Post subject: my bank says I have
Many people are of the opinion that when you total out a car, you should be paid what it would cost you to replace that car. Automobile losses are settled on an "Actual Cash Value" (ACV) basis. For simplicity- consider the ACV the depreciated value. Many cars lose a lot of their value once they're titled and off the car lot. Ask any Dodge car owner that one!
Your confusing me. Wouldn't the "Actual Cash Value" ($$$) of ones loss be the amount it would take to replace the Totaled automobile with one exactly like it?
Same condition[b]: low or high mileage, dents or no dents, rust or no rust. etc.
Plus Sales tax, title fees, tow bill(s), rental, etc.
Just asking.
FK _________________ Register Now to have your Insurance queries solved.
Your confusing me. Wouldn't the "Actual Cash Value" ($$$) of ones loss be the amount it would take to replace the Totaled automobile with one exactly like it?
I can understand your confusion, as many people are confused with the terms "actual cash value" and "replacement cost."
First of all, let me define those terms as used in the insurance world:
Actual Cash Value (ACV): The cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example- a 10-year old living room sofa will not be replaced at current full value because of a decade of depreciation. In our situation, ACV generally brings into play what you suggested:
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Same condition: low or high mileage, dents or no dents, rust or no rust. etc. Plus Sales tax, title fees, tow bill(s), rental, etc.
The insurer is concerned about mileage, damage, etc. when considering how much the ACV actually is. Cars are weird here- you can take two people who have purchased the [b]exact same car and you would typically have, at some future time, two different ACV determinations. As far as towing, rental coverage, etc., those would have to have been endorsed onto the policy to apply in most circumstances. Now, onto
Replacement Cost: The full cost to replace a damaged beyond repair or destroyed piece of property with like kind of materials, quality and functionality as the damaged or destroyed property, without subtraction for depreciation. In other words, a replacement coverage would not consider what you had that was lost, but only what you lost would cost to replace it with like kind and quality today. For example- you totalled out a 2003 Cadillac and the insurance would buy you a brand-new 2008 Cadillac. In looking at the sofa example above- instead of compensating the insured for a 10-year old sofa, it would pay for a brand-new sofa. There are some auto policies that will offer replacement coverage, but it has to be a (generally) vehicle that's either current model year or one-year old at the time of the total loss.
In conclusion, even though it sounds like cars are covered at replacement cost, they aren't. Most adjusters will look at vehicles that are comparable for valuation purposes, but that's about as far as it goes. It's up to the insured to prove if his totalled vehicle is worth more than the "average" vehicle. Recent engine work? New tires? New paint? Those types of things will, with proof, alter the ACV evaluation.
I have no idea of whether this will help. LORI!!! Could you put your two cents in here?
Oh I don't know ONLY two cents? I'm a little windy-er than that!
You've nailed it..(you never need my help Teach)..ACV is NOT replacement value, it is the well the ''actual' value (not what it costs to replace or what you paid or what you owe) of the vehicle the way it sat, prior to the accident...which includes depreciation in value for certain things...of course mileage/options/lack of options, then the dreaded 'pre-existing' damage....When your car totals (and I hear this about every 10th total) your carrier is not required to 'replace' that vehicle...I get people that say to me...'fine, you just replace it then' (when they aren't happy with the ACV)...not the way it works...
Here is it directly from (MO) the policy (A-20.5-A)...
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COMPARABLE VALUE (crap when did they get rid of ACV?--haha)--means....The depreicated worth of the vehicle or part immediately before the accident.
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