Vehicle Accident and Replacement Insurance

[fnsscates2]

My wife and family were involved in a motor vehicle incident her car was hit from the rear and flipped long story the insurance company totalled the car which was purchased new in March of 2014. They called me and gave the what they said was the payout which was $3000 less than owed - figured GAP insurance would cover the difference. Yesterday I bought a new vehicle. Today I get a call from another agent from the insurance claims office and they say that i have vehicle replacement insurance on my policy. What happens now?

Do I get another new car? Did I waste the GAP insurance money? Do they pay the difference between what I owe and a new vehicle?????

fnsscates2

 

[djs]

Vehicle replacement will cover you for the same vehicle. If you upgrade or change the replacement, then that part isn't covered. This makes sense.

What most people don't think about is sometimes you owe more on the car than what it cost to buy it. This happens when you roll negative equity into the car loan from your trade in or the dealer decided to charge more for the car than what it was worth.

Without the numbers or more details, its hard to say what happens now. GAP insurance is a bit different than vehicle replacement, but usually they are similar enough that while you have vehicle replacement coverage, GAP isn't a big benefit. Unfortunately, you usually can't add gap coverage in later which is why you need it up front.

Dan