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Should I keep GAP insurance?

Senior Contributor

Re: Should I keep GAP insurance?


maike9 wrote:

I would keep it.  I opted not to purchase GAP insurance when I bought my sport bike.  I wrecked it and had to pay $1500 out of pocked.   Funny thing is I work for a GAP Insurance provider too.

  Modcut

Color me shocked at the coincidence that you have an anecdote where GAP was necessary, that you recommend keeping it, and that you just so happen to work for a GAP Insurance provider.  


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Message 21 of 30
Valued Contributor

Re: Should I keep GAP insurance?

Wait until you have to write a check to cover the balance of your loan after your insurance company values your car much lower than you do.  While I agree that you paid too much for it, it is a necessity.  It is especially a necessity in an Accent (I have nor problem with an Accent but the resale value is not what you think it is).  Based on a quick look at BlackBooh your car is worth about $7k to an insurance company.  are you prepared to write a $4k check + deductible?

Starting a whole new chapter
Message 22 of 30
Valued Contributor

Re: Should I keep GAP insurance?

Here's a simple flow chart for GAP or any other insurance:

 

                             If ___________________ happens, will my cost be more than I can bear?

                                       /                                                              \

                                 YES                                                              NO

                                    |                                                                   |

                               Insure it!                                                   Don't Insure it!

 

It's that simple. 

 

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 23 of 30
Valued Contributor

Re: Should I keep GAP insurance?

A base model books at $11k private party on KBB. It wouldn't be to hard to get the insurance company to pay off the loan. You can negotiate with an insurance company just like you can anything else. Just have to provide comps to support the value claim. Then you can add in tax, title, loss of use and in the end a total loss will generally put you in a nicer car. Only issue is when the insurance company offers you $7k and you say okay.

 

I had a total loss on a junk car when I was younger. I was dealing with a horrible insurance company, scum really, because the guy who hit me had an SR22. I did okay though, just didn't accept their lame offer to start. I even got them to pay me for a recent car wash I had done and a tank of gas..haha. In the end after I strung them along for a month, the vehicle settlement was double what kbb had the car listed at and way more than their initial offer.

 

I would agree that an accent will depreciate like mad and paying only the minimum will bury you in negative equity. Paying $750 for gap wouldn't help the situation at all though.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Message 24 of 30
Frequent Contributor

Re: Should I keep GAP insurance?


Dustink wrote:

 

I had a total loss on a junk car when I was younger. I was dealing with a horrible insurance company, scum really, because the guy who hit me had an SR22.



Do you know what an SR22 is??  It doesn't make anyone scum.......  It doesn't make anyone less responsible, or have the ability to drive horribly.   

 

Here's something for you to learn about an SR22......   It's simply a forced self insurance for being a driver.  Meaning in states where insurance is not required, someone still by law, has to have coverage if they want to hold a drivers license.  It doesn't make your insurance go up, or make you pay increased rates.  Simply means you HAVE to hold insurance on any vehicle you are driving.....


Starting Score: 521 TU, 597 EQ, 574 EX on 6/20/2011
Current Score: 753 TU, 764 EQ, 766 EX on 02/17/2014
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Message 25 of 30
Valued Contributor

Re: Should I keep GAP insurance?


mtrsprt wrote:

Dustink wrote:

 

I had a total loss on a junk car when I was younger. I was dealing with a horrible insurance company, scum really, because the guy who hit me had an SR22.



Do you know what an SR22 is??  It doesn't make anyone scum.......  It doesn't make anyone less responsible, or have the ability to drive horribly.   

 

Here's something for you to learn about an SR22......   It's simply a forced self insurance for being a driver.  Meaning in states where insurance is not required, someone still by law, has to have coverage if they want to hold a drivers license.  It doesn't make your insurance go up, or make you pay increased rates.  Simply means you HAVE to hold insurance on any vehicle you are driving.....


I wasn't saying the person was scum. I was talking about the insurance company, they were not the best to say the least.

 

Although, I wouldn't have good things to say about the person. He had the SR22 from a past dui and was intoxicated when he hit me.

 

It is not self insurance. It is a form filed to the state that allows them to obtain a DL. 

 

As for states not requiring insurance, that is really only one state. Virginia which says you can just pay a fee. New Hampshire and Mississippi allow you to have a cash bond. Although, most state will allow businesses to self insure.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Message 26 of 30
Frequent Contributor

Re: Should I keep GAP insurance?


Dustink wrote:

mtrsprt wrote:

Dustink wrote:

 

I had a total loss on a junk car when I was younger. I was dealing with a horrible insurance company, scum really, because the guy who hit me had an SR22.



Do you know what an SR22 is??  It doesn't make anyone scum.......  It doesn't make anyone less responsible, or have the ability to drive horribly.   

 

Here's something for you to learn about an SR22......   It's simply a forced self insurance for being a driver.  Meaning in states where insurance is not required, someone still by law, has to have coverage if they want to hold a drivers license.  It doesn't make your insurance go up, or make you pay increased rates.  Simply means you HAVE to hold insurance on any vehicle you are driving.....


I wasn't saying the person was scum. I was talking about the insurance company, they were not the best to say the least.

 

Although, I wouldn't have good things to say about the person. He had the SR22 from a past dui and was intoxicated when he hit me.

 

It is not self insurance. It is a form filed by the state that says to obtain a DL they must carry insurance. 

 

As for states not requiring insurance, that is really only one state. Virginia which says you can just pay a fee. New Hampshire and Mississippi allow you to have a cash bond. Although, most state will allow businesses to self insure.


New Hampshire does not require, nor need for you to have a cash bond. 

An SR22 is self insurance.  It's to insure the driver, so there is coverage for any vehicle he may be operating. 


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Message 27 of 30
Valued Contributor

Re: Should I keep GAP insurance?

An SR-22 is a document issued by your insurance company to the DMV proving that you have liability insurance that covers any car you drive.  Many states require this be filed in order to keep a drivers license after a DUI.

 

You can have individual insurance that covers you this way without filing an SR-22; you only need to file the SR-22 if the DMV is requiring it of you.

 

Because of the driving history and legal problems that most people face who are required to file SR-22, there are many "sub-prime" insurers who specialize in these specific policies.  Many of them are very expensive, with coverage limits engineered to be barely within the law.  These "sub-prime" insurers are known for poor service and bad coverage, just as their customers are known for their high risk behaviors.

 

Dusty's comment that the insurance company was scum is probably fair, considering that D has personal experience in dealing with them.  I bet it was not fun.

 

With regard to self insurance in New Hampshire; the state website explains it pretty well.  You have to file an SR-22 if you messed up.  Here in California, all registered vehicles are required to be insured.  In fact, if you let your insurance lapse they will suspend your registration...  I found that out when I took my Charger off of the insurance during a long restoration; it was a pain to get it back.  But this was definitely not an SR-22 filing.

 

To sum up, insurance companies who specialize in SR-22 filings are mostly sub-prime, or "scum".  In most states, drivers required to file an SR-22 are also sub-prime.

 

Back to the OP's original question; I personally consider GAP insurance to be a good value, when it is appropriate.

 

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 28 of 30
Valued Contributor

Re: Should I keep GAP insurance?


Dustink wrote:

A base model books at $11k private party on KBB. It wouldn't be to hard to get the insurance company to pay off the loan. You can negotiate with an insurance company just like you can anything else. Just have to provide comps to support the value claim. Then you can add in tax, title, loss of use and in the end a total loss will generally put you in a nicer car. Only issue is when the insurance company offers you $7k and you say okay.

 

I had a total loss on a junk car when I was younger. I was dealing with a horrible insurance company, scum really, because the guy who hit me had an SR22. I did okay though, just didn't accept their lame offer to start. I even got them to pay me for a recent car wash I had done and a tank of gas..haha. In the end after I strung them along for a month, the vehicle settlement was double what kbb had the car listed at and way more than their initial offer.

 

I would agree that an accent will depreciate like mad and paying only the minimum will bury you in negative equity. Paying $750 for gap wouldn't help the situation at all though.


+1

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Message 29 of 30
New Contributor

Re: Should I keep GAP insurance?

Some people don't understand just because a insurance company offers a certain amount means that is the final number. Often the insurance companies low ball you and you need to come back with something else. I hear people talking about this all the time about how the insurance company gave them almost nothing and I ask did you fight it and most say no because they didnt know they could.

On a side note some insurance companies offer loan/ lease playoffs on the policies they offer and the amount is included in your monthly payments. Then plus with this is if you get into real positive equity with your car you can just cancel and not pay it any more since you don't need it.
Message 30 of 30