What Is A Gap Insurance Coverage In Washington?
Reader’s Question:
I was advised that if I will have a loan on my car here in Washington, I need to get gap coverage for it along with my insurance. What exactly is this gap coverage and what does it have to do with having a loan on my car?
Marc
Lakewood, WA
The horrid fall of your new vehicle’s value the moment you drive it away from the seller’s area can have shocking and unwarranted burden on your pocket if your vehicle will be declared a total loss in an accident. In case you are eligible for a payment on your totaled vehicle on your car insurance in Washington, your insurer will give you the actual cash value of your automobile. Then again, the total payment your car insurance provider estimates as the vehicle’s actual cash value could be thousands of dollars further than what you have a loan from the bank or finance company. Because you will be accountable to pay the rest of your loan even if your vehicle is totaled, you may need to produce hundreds, possibly thousands in cash, except if you purchased gap coverage.
Your gap insurance coverage would pay the disparity between the approximation of your car insurance provider’s actual cash value of your vehicle and the money that you still have a loan from the bank or financial company. You may think that when your vehicle is totaled because of an accident, you will recoup the amount you owe on the vehicle or the money you paid for it if it is new enough. Apparently, vehicles do not cling to their value similar to what you think. When you drive away the vehicle, you have immediately lost some of the fees that you paid for.
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