Anyone familiar with purchasing a newer vehicle knows about Gap insurance-a product that dealerships try to force on you while purchasing a newer vehicle.
When I purchased my last car, the dealership employee said, "I would never allow a relative or a friend to walk out of here without purchasing Gap insurance.
" After listening to her convincing sales performance, I dropped $500 for the policy.
So what is Gap insurance? Let me explain: If your new car is totaled, you are still liable for the remaining balance after the insurance settlement.
For instance, imagine your $5,000 vehicle is destroyed in an accident.
Thankfully, the other driver has insurance and sends your lending institution a check for what they claim to be the value-$3,000.
Although you no longer have the car, you are still on the hook for the remaining $2,000.
However, if you have Gap insurance, they will cover the remaining balance.
Unfortunately, this isn't what happened after a careless driver ran a red light and totaled my car.
Thankfully, he had insurance.
Coincidentally, we both had the same insurance company.
The insurance company agreed to pay me the $9,000 Blue Book value.
After several weeks, I received my $9,000 settlement, leaving me with a $1,000 tab due to the bank.
I immediately filed my claim through the gap insurance company to pay off the remaining $1,000.
To my dismay, they denied my claim and refused to pay.
I contacted the agency about the denial and reminded them that I paid $500 for my gap policy.
The gap insurer informed me that the insurance company should have paid the entire $10,000.
They advised me to contact the insurance company and request an additional $1,000 to pay off my balance.
I called the insurance company and asked for an additional $1,000 to pay off my loan-they denied my request and told me the Gap insurer was liable.
I then went back to the Gap insurer and was told to pay the $1,000 back myself because they weren't going to pay the claim.
After three rejections, I was furious.
Finally, I approached the dealership where I bought my car.
I left numerous messages for the dealership manager about my situation.
After he didn't return my calls, I went to the dealership to speak to him.
On the day I went to discuss my problem he was out for the day.
Frustrated, I explained my situation to the dealership's cashier and told her that no one would help me.
She suggested I contact our local news channel's consumer assistance number.
Within days of contacting a local news consumer advocate, I received a call from them offering to assist me.
The news station called and asked me to conduct an on-camera interview.
I told him that I had been going through this issue for nearly six months.
After my interview, the news channel offered their assistance.
Hours later, I received a message on my answering machine.
The news reporter I spoke to said I could expect my loan to be paid in full within a week.
The reporter had threatened to go on the air with my story and bring them bad press if they didn't help me.
Within a week, my loan was paid in full and I eventually got a new car.
Sometimes the squeaky wheel does get the grease.
When I purchased my last car, the dealership employee said, "I would never allow a relative or a friend to walk out of here without purchasing Gap insurance.
" After listening to her convincing sales performance, I dropped $500 for the policy.
So what is Gap insurance? Let me explain: If your new car is totaled, you are still liable for the remaining balance after the insurance settlement.
For instance, imagine your $5,000 vehicle is destroyed in an accident.
Thankfully, the other driver has insurance and sends your lending institution a check for what they claim to be the value-$3,000.
Although you no longer have the car, you are still on the hook for the remaining $2,000.
However, if you have Gap insurance, they will cover the remaining balance.
Unfortunately, this isn't what happened after a careless driver ran a red light and totaled my car.
Thankfully, he had insurance.
Coincidentally, we both had the same insurance company.
The insurance company agreed to pay me the $9,000 Blue Book value.
After several weeks, I received my $9,000 settlement, leaving me with a $1,000 tab due to the bank.
I immediately filed my claim through the gap insurance company to pay off the remaining $1,000.
To my dismay, they denied my claim and refused to pay.
I contacted the agency about the denial and reminded them that I paid $500 for my gap policy.
The gap insurer informed me that the insurance company should have paid the entire $10,000.
They advised me to contact the insurance company and request an additional $1,000 to pay off my balance.
I called the insurance company and asked for an additional $1,000 to pay off my loan-they denied my request and told me the Gap insurer was liable.
I then went back to the Gap insurer and was told to pay the $1,000 back myself because they weren't going to pay the claim.
After three rejections, I was furious.
Finally, I approached the dealership where I bought my car.
I left numerous messages for the dealership manager about my situation.
After he didn't return my calls, I went to the dealership to speak to him.
On the day I went to discuss my problem he was out for the day.
Frustrated, I explained my situation to the dealership's cashier and told her that no one would help me.
She suggested I contact our local news channel's consumer assistance number.
Within days of contacting a local news consumer advocate, I received a call from them offering to assist me.
The news station called and asked me to conduct an on-camera interview.
I told him that I had been going through this issue for nearly six months.
After my interview, the news channel offered their assistance.
Hours later, I received a message on my answering machine.
The news reporter I spoke to said I could expect my loan to be paid in full within a week.
The reporter had threatened to go on the air with my story and bring them bad press if they didn't help me.
Within a week, my loan was paid in full and I eventually got a new car.
Sometimes the squeaky wheel does get the grease.
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