Victoria Nissan News

How GAP works in Texas - Graphic source - Allstate

According to an October 2011 report from the Texas Department of Insurance, 20% of Texas drivers are uninsured. That’s 1 in 5 of Texas motorists. How do you protect yourself from these drivers? Victoria Nissan recommends two steps you can take toprotect both your vehicle and your pocketbook.

The first step is to have good insurance policy from a reputable insurance company that includes Uninsured/Underinsured motorist (UM/UIM) coverage. This additional coverage pays for your injuries and property damage caused by a hit-and-run driver or a motorist without liability insurance. It will also pay when your medical and car repair bills are higher than the other driver´s liability coverage.

The second step is to purchase a Guaranteed Auto Protection Plan (GAP) when you do the paperwork for your next vehicle. A GAP Plan protects you from having to make payments on a vehicle that is a total loss.

Here’s a scenario that occurs nearly every day in our area – An uninsured motorized hits the new Nissan Altima you just purchased. You have UM/UIM coverage and file the claim. Your insurance company declares the car a total loss and values the car at $23,000, about what you paid for it a few weeks ago. Your insurance company sends a check to the lienholder (the bank who has the car loan) but you may still owe thousands more. In many cases, you may actually owe more on the car than what it’s worth. Why?

The reasons include rolling over the negative equity from a previous vehicle, high mileage driving that decreases your car’s value faster than you are paying on it, and market conditions beyond your control.

Market conditions, like rising gas prices, can cause the value of large SUV’s to plummet, and a total loss at that time could result in having payments on a vehicle you don’t even own any more. You will need to replace the vehicle so you will in effect be paying two payments, one on the old totaled car, and one on the new one you purchased to replace it. Not very fun!

Guaranteed Auto Protection is available for just this scenario. When you financed your new vehicle you purchased a GAP Addendum. This GAP addendum protects you from having to make payments on a car you no longer own. How?

The GAP Plan pays the difference between what you owe on the car and what the insurance paid. Example – You owe $29,700 on a car that your insurance company valued at $23,000. That leaves a $6,700 balance. When you file a covered GAP claim that $6,700 balance will be paid in full to the bank. You don’t have to worry about the remaining payments and your credit is protected when the loan is paid in full.

Common GAP questions:

1. Do I still make payments on my car even if I have filed a GAP claim? Yes, You are still responsible for payments until the GAP claim is settles. It can take several weeks to settle an insurance claim and if a payment is due in that timeframe, you are still responsible for the payments.

2. What do I need to file a GAP claim? In most cases you will need the police report from the accident, payment history on the loan, and a claim form from the GAP administrator. Keep in mind this post does not cover all scenarios and exclusions. Read the GAP Addendum carefully and ask the dealership’s finance manager about any questions you have.

3. Is GAP protection insurance? The GAP Plan/Addendum Victoria Nissan offers is not insurance. It is a Guaranteed Asset Protection Addendum. While many customer know this plans as “GAP insurance” it is not an insurance policy.

Additional reading –

https://www.allstatecarcare.com/Products/GAP http://www.tdi.texas.gov/auto/frvp_agent.html