Insurance Question

[Ranger Mom]

This was just brought up at work and I don't know the answer.

If you have full coverage on a vehicle and you total it, does the insurance pay off what you owe on the vehicle, or just the book value of what the vehicle was worth at the time it was totalled???

[GreenMonster]

Good question. Most just pay what the vehicle is worth. State Farm, I believe, has come out with a new program that will cover full replacement of your vehicle if it is new and totalled. It costs extra of course.

[Pudlugger]

Originally posted by Ranger Mom
This was just brought up at work and I don't know the answer.

If you have full coverage on a vehicle and you total it, does the insurance pay off what you owe on the vehicle, or just the book value of what the vehicle was worth at the time it was totalled???

Some lenders offer a full replacement rider for about 5 bucks a month on the payment. Also, some insurers offer full replacement as well. Check with your agent.

[44INAROW]

unless you have an endorsement on the auto policy (companies have all kinds of names) GRC (Guaranteed Replacement Coverage) (GAP) type - then you will be paid ACV - Actual Cash Value less the deductible. GAP insurance can be purchased when you buy the vehicle and added to your note like Credit Life or like I said - some companies offer "gap type" coverage. All companies are different - some go by KBB Kelly Blue Book and some get prices from local dealers for 3 vehicles and average a price.

[BILLYFRED0000]

Originally posted by Ranger Mom
This was just brought up at work and I don't know the answer.

If you have full coverage on a vehicle and you total it, does the insurance pay off what you owe on the vehicle, or just the book value of what the vehicle was worth at the time it was totalled???

Insurance covers local wholesale value. In other words the actual value of the truck at the time of its untimely demise. You now legally purchase gap insurance which is exactly as it implies the gap between what is owed and what it is actually worth.

[LHMom]

RM - I highly recommend GAP insurance. It's cheap, and my best friend just ended up owing ~$3K on a car her son totaled.

(And unfortunately w/ 2 teenage sons, I became way more of an expert than I wanted to be.)

[Ray_BearKat]

they just cover what its worth you need GAP to cover the remaining value...

[Ranger Mom]

Thanks!! I had never heard of GAP but have passed the information on!!

[bobcat1]

I've always loved GAP. :D