Jerome just found out about gap insurance the hard way, after his nephew totaled his car.
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.