Developing an outstanding understanding ofgap insurance in Texas is essential in helping you secure your “tomorrow”. Questions such as: how much is gap insurance in Texas, what it is, why you need it, and how to buy it trouble most people. Gap insurance policy happens to be the kind of car insurance coverage that pays for the repair or replacement of your car if it’s damaged or stolen.
A close focus
Positively stated, gap insurance pays for the “gap” between the actual cash value of your car (determined when your car is in an accident or stolen), and the amount you are willing to spend to get it repaired or replaced. When you drive an insured vehicle, the insurance company pays for any damage or loss you cause to other people’s property. But, they won’t pay to repair or replace your car.
In most cases, that means you are out hundreds, or even thousands, of dollars if your car is in an accident or stolen. With gap insurance, the insurance company pays the difference between the ACV of your car and the amount they would have to pay to repair or replace your car. This can be a real lifesaver for many people.
One of the main reasons why people decide not to purchase gap insurance is because they don’t understand how it works. Bear in mind that gap insurance in Texas is about securing your future, and thus it is worth it taking the time to understand it more elaborately. However, you still need to know exactly how much is gap insurance in Texas.
In some cases they believe they don’t need it because they rarely if ever drive their cars off-road, or they have comprehensive coverage on their vehicle already. Both of these situations are false. The fact is, most people who drive sedans, minivans, and sport utility vehicles off-road are involved in an accident every year. And, comprehensive coverage doesn’t always apply to “off-road” damage.
For example, if your tires are slashed, your comprehensive coverage may not apply. So, what you really need is gap insurance. Another situation where you may not need gap insurance is when you are leasing a car. If the car you are leasing has very low mileage on it, the ACV of the car may be so high, the insurance company will pay to repair or replace the car without you having to pay anything.
Case scenario
Since leasing is usually only for three to five years, this could present a real problem for you if you are in an accident or have your car stolen after you have leased the car. Again, you should definitely consider purchasing gap insurance in Texas. Another situation where you might want to consider gap insurance is if you have a high-end vehicle. Let’s say you drive a $20,000 car. Ocala, Florida has some of the highest crime rates in the entire country. Therefore, if your car is stolen or damaged in an accident, it is likely to be “re-sold” for less than $10,
In this case, you could end up with a “stolen” car that is worth only $5,
And, since you are probably not going to spend much (if any) more than $9,000 to get your car repaired or replaced, you could find yourself owing the insurance company an amount equal to three times the actual cash value of your car ($18,
It isn’t a pleasant thought, is it?
Evidently, it’s something a lot of people have to deal with on a regular basis. That’s why so many people are willing to pay extra for gap insurance. If you have gap insurance, you will never again have to worry about being stuck with a “worthless” car because it was damaged or stolen.
How Does Gap Insurance Work? Basically, it works like this: Let’s say your car is actually worth $12,500, and it has damage or has been stolen. The first thing the insurance company will do is send an adjuster to inspect the damage. After the adjuster inspects your car, he will determine the actual cash value of your vehicle. Then, he will tell you what amount they are going to pay to repair or replace your car.
Usually, this amount will be less than the actual cash value of your car. The insurance company will make up the difference by paying you the amount of “gap insurance” they owe you. What if the amount the insurance company says they are going to pay to repair or replace your car is more than the actual cash value of your car?
You need to be thoughtful
Since that would be impossible, that situation never occurs. Now, let’s say the amount the insurance company says they are going to pay to repair or replace your car is equal to the actual cash value of your car. In this case, you will not receive any gap insurance payment from the insurance company. The reason is simple: If the actual cash value of your car is $12,500, then the amount the insurance company says they are going to pay to repair or replace your car should be at least $12,
However, since they only paid you $9,000 for the car, they have “left over” money with which to make a “profit”. How much profit? Well, that depends on how many cars they have to repair or replace. Let’s say it’s three. In this case, the insurance company would make up the difference by paying you $18 3 times the actual cash value of your car.
Remember, they only paid you $9,000 for the car so, they must be getting something else for the car besides what you paid for it.
Important considerations
First of all, they must get the VIN of the car. The Vehicle Identification Number is a number written right on the front of the dashboard of your vehicle. It is a serial number like a phone number which is assigned to your car when it is manufactured. By the way, if you lease a car, the lessee usually has the option to purchase the car at the end of the lease period.
Therefore, when the insurance company sends an adjuster to inspect your car, they will be able to determine if the car is a brand new car that was just leased from you or an older car that was purchased by the lessee at the end of the lease period.
If it’s an older car that was purchased by the lessee at the end of the lease period, the insurance company will make a “profit” of approximately $6,250 on that particular car. Bear in mind that gap insurance in Texas is cheap, easy to get and, if you have it, it can really help you out in a sticky situation. Another thing you should consider is what happens if you have a total loss.
Besides receiving the actual cash value of your vehicle, you could also receive a check for an amount up to the full value of your vehicle which may be more than the actual cash value. In this case, you would still receive the gap insurance payment from the insurance company.
Of course, you would have to wait until the check cleared before you received the extra amount. Remember: The “extra amount” is not from the insurance company but, rather, a check they receive from some other source such as a “special fund” created by the government for victims of natural disasters or acts of God. Do you need to learn how much is gap insurance in Texas? The short answer is yes, you do need gap insurance.
Even if you are in perfect health and have no record of ever having an auto accident, you need gap insurance. Let me tell you a true story: Once upon a time, I was teaching a “Survival Car” class in San Diego and one of the students in the class had just purchased a brand new Honda Civic. He told me he decided to take the class because he wanted to learn how to survive if he ever got into a collision. Then, he got into a collision. Actually, it wasn’t just any old collision, it was a severe collision.
In addition to totally destroying his vehicle, it caused him to suffer a broken leg, several broken ribs, multiple contusions and lacerations and other assorted injuries which will probably leave him with permanent disfiguring scars. Do you think the insurance company made that guy whole again? Hell no! They gave him only $6,250!
That means, they made a profit of $3,250 on his car which is more than enough to keep them in business for about one-hundredth of a second. In fact, in many cases, the insurance company makes so much profit on a claim, they actually end up paying the victim less than the actual value of his vehicle!
Now, let’s talk about how the insurance companies do this. First of all, they pay as little as possible to repair your vehicle. If they do an adequate job of repairing your vehicle, they will not make any “profit” on the repair job at all. Therefore, their first goal is to have you sign a release saying that you are satisfied with the repairs and will not hold them responsible for any further damages to your vehicle.
Next, they will send an adjuster out to inspect your vehicle. The purpose of the adjuster is twofold: One, he will determine if your vehicle can be repaired so that it is road worthy again or if it should be replaced.
Do your part and leave the rest to the service provider
Nevertheless, even if your car is totally destroyed, the adjuster will still send a check to you for an amount up to the full value of your car which may be more than the actual cash value. In this case, you would still receive the gap insurance payment from the insurance company. Remember: The “extra amount” is not from the insurance company but, rather, a check they receive from some other source such as a “special fund” created by the government for victims of natural disasters or acts of God.
Do You Need Gap Insurance? The short answer is yes, you do need gap insurance. Even if you are in perfect health and have no record of ever having an auto accident, you need gap insurance. Let me tell you a true story: Once upon a time, I was teaching a “Survival Car” class in San Diego and one of the students in the class had just purchased a brand new Honda Civic.
He told me he decided to take the class because he wanted to survive if he ever got into a collision. Then, he got into a collision. Actually, it wasn’t just any old collision, it was a severe collision. In addition to totally destroying his vehicle, it caused him to suffer a broken leg, several broken ribs, multiple contusions and lacerations and other assorted injuries which will probably leave him with permanent disfiguring scars. Do you think the insurance company made that guy whole again? Hell no! They gave him only $6,250!
Formerly published in “The Insurance Insider” magazine. This story was read by hundreds of thousands of people and was one of the main reasons I created my famous “Wreckage” gap insurance policy. In fact, one of my readers sent me a $5 bill that was attached to a piece of paper with the word “WRECKAGE” written on it. This is what happens to your car when it is in an accident caused by another driver who does not have enough insurance. Now, let’s talk about how the insurance companies do this.
First of all, they pay as little as possible to repair your vehicle. If they do an adequate job of repairing your vehicle, they will not make any “profit” on the repair job at all. Therefore, their first goal is to have you sign a release saying that you are satisfied with the repairs and will not hold them responsible for any further damages to your vehicle.
Next, they will send an adjuster out to inspect your vehicle. The purpose of the adjuster is twofold: One, he will determine if your vehicle can be repaired so that it is road worthy again or if it should be replaced. Nevertheless, even if your car is totally destroyed, the adjuster will still send a check to you for an amount up to the full value of your car which may be more than the actual cash value. In this case, you would still receive the gap insurance payment from gap insurance in Texas.
Remember: The “extra amount” is not from the insurance company but, rather, a check they receive from some other source such as a “special fund” created by the government for victims of natural disasters or acts of God. Do You Need Gap Insurance? The short answer is yes, you do need gap insurance. Even if you are in perfect health and have no record of ever having an auto accident, you need gap insurance. Let me tell you a true story: Once upon a time, I was teaching a “Survival Car” class in San Diego and one of the students in the class had just purchased a brand new Honda Civic. He told me he decided to take the class because he wanted to survive if he ever got into a collision. Then, he got into a collision.
Actually, it wasn’t just any old collision, it was a severe collision. In addition to totally destroying his vehicle, it caused him to suffer a broken leg, several broken ribs, multiple contusions and lacerations and other assorted injuries which will probably leave him with permanent disfiguring scars. Do you think the insurance company made that guy whole again? Hell no! They gave him only $6,250!