Gap Insurance Denial over a 60 cent Accounting Error?

[marindependent]

Arizona man says his gap insurance won't pay an $18,000 claim for his totaled BMW because of a 60-cent mistake​

My guess is that this is exactly why consumers do not like insurers.

"He bought the BMW for $60,517.86. At the time of the accident in late 2023, his insurance company wrote him a check for $26,709 — the vehicle’s total value — but he still owed $45,360 on the loan — meaning he had a financial gap of $18,651, which should have been covered by his gap insurance."

"However, his sizable gap insurance claim was denied over a 60-cent error in his auto loan paperwork...No one caught that 60-cent mistake until Munoz submitted the $18,651 claim to Safe-Guard, his gap insurance company, which he says denied payment over the discrepancy in the paperwork."

"Harper contacted Safe-Guard and questioned them about Munoz’s claim. Since the news program got involved, Munoz told Harper he has received notice from the insurer that his claim is finally being processed."

 

[Markthebroker]

Since the news program got involved, Munoz told Harper he has received notice from the insurer that his claim is finally being processed."

Sounds about right.

 

[Allen Trent]

As big of question is how did a 60k car depreciate to $26k so quickly.

 

[adjusterjack]

Easy. You finance the whole purchase price at a high interest rate for the longest term available.

7 year loans now, maybe 8.

Anyway, the ACV of the car drops faster than a turkey from a helicopter.

Or maybe he was under water on his prior loan and rolled it into the new loan or bought all the extras and rolled them into the loan.

Or any number of stupid decisions that people make when they buy a new car.

 

[marindependent]

 

[Al3x Lee]

Picture, if you will, a world where the true value of everything is measured in its current state. A world where a car driven off the lot instantly loses value, and a garbage house ravaged by fire yields only its charred remnants in reimbursement. This is the realm of actual cash value, where depreciation reigns supreme and reality is grounded in the cold, hard facts of the present moment.

But now, journey with me into the Twilight Zone, where insurance isn't bound by the tangible and the here-and-now. Here, in this strange and bewildering dimension, concepts like GAP insurance and replacement cost roam free. Imagine a place where the moment you lose your car, another one, shiny and new, takes its place without you paying a dime. A world where the burnt-out shell of a home is miraculously restored to its former glory, not as it was, but as it could be, brand new and untouched by time.

However, in this peculiar landscape, the glittering promises of GAP and replacement cost come with a dark underbelly. The allure of these extraordinary coverages drive up premiums, pushing the cost of insurance beyond the reach of many. Policies become laden with loopholes and exclusions, leaving claims unpaid and policyholders disillusioned. The very fabric of fairness frays as good stewards of their property find themselves penalized by these increased costs and loopholes, their meticulous care unrewarded, as their uncaring counterparts are rewarded with brand new things, while treating their property like trash.

GAP insurance, with its tantalizing promise to cover the shortfall between what is owed and what is lost, becomes a labyrinthine trap of accounting errors and denials. Replacement cost, with its siren call of restoring the ideal, encourages reckless behavior, as people take on more risk, believing they will never truly lose.

In this Twilight Zone, the seductive simplicity of 'never losing money' masks a complex web of rising costs, denied claims, and shattered expectations. The once comforting safety net becomes a tangled web of unforeseen consequences, catching the unwary in its snare.

So, the next time you look at your insurance policy and see only the stark reality of actual cash value, remember that actual trash value would have saved Manny Munoz. He would have put more care and consideration into the selection of his vehicle if he didn't feel the warm bubble of his supposed GAP insurance. A story where the extraordinary becomes ordinary and the improbable, probable. And as you ponder the strange allure of a world where losses are magically restored, ask yourself—what price would you pay to live in such a dream?

Welcome to the Twilight Zone.

 

[Allen Trent]

emember that actual trash value would have saved Manny Munoz. He would have put more care and consideration into the selection of his vehicle if he didn't feel the warm bubble of his supposed GAP insurance

wow----victim blaming. Poor soul was merely getting himself a reliable starter vehicle to get to & from work. Then you go & blame him for his selection of a $60k reliable vehicle. Probably gonna blame him for going to a private college for 6 years to better himself by going into debt too.

LOL

 

[LeeV]

As big of question is how did a 60k car depreciate to $26k so quickly.

BMW's have one of the worst depreciation values in the market. This cars' depreciation is actually very close to where it should be. One of these factors is the technology and gadgets that are usually found in them. The used car market does not necessarily value these options very much. By his own admission in the news article, he loaded the vehicle up.

 

[marindependent]

One of these factors is the technology and gadgets that are usually found in them. The used car market does not necessarily value these options very much.

Cant imagine the Gap Insurance market for Flat Screen TVs

 

[somarco]

I understand EV's drop like a rock the first year.

A friend bought a Nissan Leaf a few years ago. The car was around 2 years old, and he got it for a third of the original list price.


the study shows that Tesla models are losing value almost 30% year-over-year.

Study Shows Tesla Cars Depreciate 70 Times Faster Than Chevy

Uncover the rapid depreciation of Tesla vehicles at -28.9% in a revealing study, showing Tesla's used car prices leading in value loss against other brands.

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