Comprehensive Auto Insurance Louisiana LA
Reader’s Question:
Hi there! I’m John from Monroe, Louisiana. I’m planning to purchase a new SUV on an 84-month loan term. I once heard a story about a friend of mine whose brand new car got stolen before he was able to pay his loan off. Will a comprehensive insurance cover all my losses if this ever happens to me?
John
Monroe, LA
Well, John with a comprehensive auto insurance, you might be granted your car’s actual cash value at the time of the accident or theft. So if it was worth, say, $300 when it was totaled, your insurance company will pay you that amount.
As you may know, car values go down significantly in a matter of months. So the problem is the value of your vehicle when you lose it might be less than your outstanding balance. This depends largely on the terms of your loan. That means you will be receiving less (sometimes much less!) from your insurance company than the amount you owe for the car.
You can prepare for this situation by getting yourself a gap insurance. Basically, this type of insurance guarantees that you won’t have to pay the difference between the value of your car and your loan.
Let’s put it this way: If at the time of the accident, the actual cash value of your car is $300 and you still owe the car company $400 dollars, gap insurance will shoulder the $100 for you. There are however limits to the coverage. You should really visit an insurance dealer to get a clearer picture. Be sure to inform him of the details of your loan or lease, and ask him specifically what is included in the gap insurance coverage.
Tags: auto insurance, car insurance, comprehensive insurance coverage