When a vehicle is totaled, our clients are first worried whether everyone is okay. For some, it goes from bad to worse when they realize that they owe more on the car than it’s worth.
We often have to explain to our clients that insurance companies are only required to pay what the car is worth, which is called fair market value. If a loan is more than that, you’re going to owe the finance company the difference.
This is why the first question we ask our clients in this situation whether they have Gap Coverage. This is insurance that covers you if you owe more on your vehicle than its fair market value. It could mean the difference between being able to get a new car and having to take the bus for a while.
Our advice to all our clients is to find a local insurance agent you trust. Your agent will be able to answer your questions and make sure you’re covered if you’re in this unfortunate situation. Of course, if you have any questions, feel free to call for a free, no obligation consultation.