Recently I had just bought my new car and got a loan for 25,000. 17 days after I bought it I got in a wreck and totaled my car. I did not have insurance but I had GAP insurance. How does it all work am I still able to use the GAP insurance even though I didn't have acutal insurance?

GAP insurance, as I understand it, covers the difference between the book value of your car which is what your regular insurance pays and the balance of the loan on the car.

When you got the GAP insurance, were they aware you had not collission coverage?

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Originally Posted by ScottGem

GAP insurance, as I understand it, covers the difference between the book value of your car whihc is what your regular insurance pays and the balance of the loan on the car.

When you got the GAP insurance, were they aware you had not collission coverage?

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Exactly - gap is additional insurance on top of the owner's insurance, basically guarantees that the amount of the loan will be paid off if there is an accident.

It's important in new cars where they depreciate the moment you turn the key - your $35,000 car is worth $28,000 if you are in an accident on the way out of the dealership.

I've never seen the company writing the gap insurance not build on top of the owner's insurance so I don't know how this happened.

Anyway - I see no coverage here and a lawsuit against the owner.

GAP will pay the difference between what the book value of the car is, and what your loan is,

Without regular insurance you have no libility coverage for the other person, and you do not have coverage of your car to the book value of it