Gap Insurance Needed?
Dave explains to Jerome about gap insurance.
Jerome let his nephew borrow his car, and the nephew totaled the vehicle. He thought he had full coverage, but he found out about gap insurance. Now he owes $3,000 and they won’t give him any extra time to pay that. He has some other smaller debts. What can he do?
Read what Dave says:
Gap insurance means the car was not worth as much as was owed on it and the insurance company will only cover what the car is worth. The car must have been worth $3,000 less than what you owed, and that’s the gap in your insurance coverage. Since there’s no car anymore, they’re calling that money due immediately.
Just pay this off as fast as you can. If you took an extra job, you could pay this off in a couple of months. Don’t panic – they’ll work with you, especially after you send them that first $1,000 check.