When comprehensive insurance just isn't enough

Sometimes life’s harshest lessons come at the worst possible time.

I learnt a harsh lesson about insurance recently when I was involved in a car crash. Happily I was quite OK but my car was a write-off. The other driver was entirely at fault, his insurance paid out on my claim and I didn’t even have to pay the excess. But here’s the harsh bit – my car won’t be replaced, I won’t get any money for another one and I’m now looking at a bill for nearly $11,000.

Mind the gap

So how does that work? Well it’s all about the gap – the gap between the insured value of your car and what you still owe your finance company before the car’s paid off. That gap can be alarmingly wide and you really don’t want to discover just how wide it is after your car’s been written off. Believe me – I know! In my case it was more than my car was worth.

If your car is written off and it’s under finance then it’s your finance provider – not you – that gets the insurance payout. If there’s anything left over after that, then you’re entitled to it, but if there’s still money owing on it you’re left footing the bill. With interest and fees that can be a pretty scary sum.

Your only option then is to either grit your teeth and pay up or take legal action to try to extract the money out of the driver who caused the accident. That’s what I’m now doing. It’s even worse, of course, if the accident was your fault. Either way you just don’t want to know about it.

GAP insurance

There’s not much good news in any of this except for one thing: It’s a problem that needn’t happen in the first place because you can protect yourself by insuring against it. It’s called GAP insurance – Guaranteed Asset Protection – how’s that for a neat little acronym! As the name suggests, it protects you for the gap between your finance payout and the insured value of your vehicle.

GAP insurance frequently comes with all sorts of potential add-ons like coverage for additional inconvenience you might have suffered in a crash.

If you’ve got any sort of finance on your vehicle then GAP insurance just makes sense, saving you from some serious financial pain and a mountain of hassle after a crash.

The lesson here is to mind the gap and insure against it. So where do you go for the best advice on GAP insurance? Fleetcare isn’t tied to any financial institution and can therefore offer you the independent insurance advice your business needs to protect it when the worst happens, so contact us today. Oh how I wish I’d done that!

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