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How does GAP work after a VEHICLE is declared total loss

Laredo, TX |

my niece had gotten a brand new vehicle about 1 month ago the time of purchase they asked if they were interested in buying GAP insurance which they did,a week later she was hit by 18 wheeler they picked up the car today and was later notified that the car was a total loss to expect an adjuster,my question is the car price at the dealer ship was 22,000 now if they are sending an adjuster to value the car how will GAP paid the remaining and will the value the adjuster gives is that money to my nice?????

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Filed under: Car loan
Attorney answers 3


I hope your niece is Okay.... Bravo for getting the gap insurance. I always recommend it especially during the first few years of your car loan since this is the time when you are most likely "upside down" on the car. The insurance company will evaluate the car. Then, if the insurance company's evaluation is less than the loan balance, the gap insurance will cover the difference. The only way your niece will net any money is if the adjuster's evaluation is more than the loan balance. Be sure to notify the gap insurance company of the accident so that they will be ready in case a "gap" claim needs to be made.

Another option is to push the claim through on your own insurance policy. They might come up with a better evaluation (even after the deductible) than the truck's insurance company.


Hopefully she was not seriously injured. Great advice from Attorney Slim. GAP insurance is made for this very situation. Depending on your niece’s policy, she could get full replacement value for her car since it is only a month old. She needs to talk with her insurance agent ASAP to see what her policy specifically covers.

Good luck.

DISCLAIMER: David J. McCormick is licensed to practice law in the State of Wisconsin and this answer is being provided for informational purposes only because the laws of your jurisdiction may differ. This answer based on general legal principles and is not intended for the purpose of providing specific legal advice or opinions. Under no circumstances does this answer constitute the establishment of an attorney-client relationship.


The two attorneys who have already answered have provided sound advice.

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