dober174

Hi guys - I'm new on this forum and I have a question. I have a 2002 TL. Couple hours ago, as I was going to the store, some idiot hit me, and I flew into a tree, and there was nobody around, it was dark and he just left. My car is totalled... the front is dead. I have progressive insurance, full coverage (collision, comprehensive, uninsured motorist etc...) and my financing from honda finanacial services has gap insurance coverage. I have a high intrest rate (14%) b/c this is my first car I've financed. I bought the car for $23,000 used, put $3500 down and owe now a lot. For the 8 months I've owned the car I've paid total with down payment $7600, and the car is now totalled. How does total loss insurance work? Am I just out the $7600? My insurance company will pay me whatever market value on the car is, but does my gap insurance pay me only what remains of my financing, or do they cover the money I've already put into the car as well?
Thanks in advance......

docrob

gap insurance would pay for any gap between what you owe on the car and what it's really worth. Let's say you only had 1 car payment left and now you would be expecting the insurance company to pay for all your previous payments and down payments? It doesn't work that way. Check some of the car value sites to get an idea of what your car is worth so then you can compare that to what your insurance company says it's worth. Sounds like you may lose some $$, but ultimately you'll have to see what your insurance company says.

RHunter69

There is no thing as "total loss insurance." Your car may be deemed a total loss and the claim will be handled under your collision coverage. Your carrier will determine the ACV (Actual Cash Value) of your car, probably based on the market value (selling prices) of comparable cars in your area. Your deductible will also be subtracted from that amount to come up with the settlement offer. Should you decide to keep the salvage for some reason, the fair market value of the salvage will be subtracted, too. docrob's explanation of gap insurance is accurate.

Here's an example based on your figures: Let's say you still owe $18,000 on your car. The insurance company computes the ACV at $21,000 and you have a $1000 deductible. The offer to settle your claim will be $20,000, but of that, $18,000 will go to the finance company to pay the loan. The remaining $2k goes to you. Small consolation, but it's something.

Now let's say the ACV is $18,000. Subtracting your deductible leaves a net of $17,000, which will all go to the finance company since you owe more than that (you're "upside down" on your loan). Gap insurance should cover the remaining $1000.

Hope this helps. Good luck and glad that you're not hurt.

zibadun

don't agree to their first offer for ACV though. prepare to hassle just like at the dealer when buying a car. If you did your own research of vehicle prices the insurance company is required to take that into account. They would normally settle in the middle from their first offer and the value that you've came up with. If they resist too much tell you are about to file a complaint with your state's insurance comissioner; insurance companies don't like to deal with those complaints. They may also offer to go arbitrage to determine the value, but that rarely plays to your advantage... regards

ArN 2000 TL

Your not out $7600. That is what you paid to drive the car for the time you had it. The insuracne company will likely pay off your loan amount and you probably won't see a dime with an interest rate like that.

fsttyms1

he needs to chec with the place he took the GAP from. Mine on my car gives me 3k on top of paying the difference to help put forth new down payment

03CoupeV6

I've never heard of that.. hrm.

My GAP insurance only pays what's not taken care of by the insurance company. So yes, I'd say there's a good chance you're "out" that $7600 - but not really, you did get to use the TL for 8 months. I never pay anything down on any vehicle for this reason.