Quote:
|
GAP insurance buys you a new coach. Otherwise you would get probably some blue book value for your claim.
|
I'm gonna nitpick here because "gap insurance" is technically a different product than an Agreed Value on a Collision & Comprehensive Loss policy. Many people use the terms interchangeably, but they really should not. Gap Insurance pays off any the loan balance that exceeds the insurance pay-off, whatever it is at the time of loss. Technically it is insurance on the loan, not on the RV, so it never puts money in your pocket. The lender is the payee for the insurance, not you.
If your coverage in the RV collision & comp policy is enough to pay off any loan, you don't need or want any "gap insurance". It may be that a "blue book" Fair Market Value is enough to cover the loan balance, in which case you don't need any extra coverage. But if your loan exceeds 70% or so of the purchase price, Fair Market Value is probably not going to cover the loan payoff throughout most of the loan period. Prudence says you should have insurance to avoid ending up in the hole. You can do that by purchasing gap insurance on the loan, or by increasing your Collision & Comprehensive coverage to pay YOU enough to pay off the RV loan. There are various ways to do that, e.g. new replacement value, agreed value, or purchase price value coverage. Each of those is slightly different, but all pay more than Fair Market Value. Plus, any extra after the loan lien payoff goes into your pocket. You can put it towards a new RV or take a vacation in Aruba. Your choice. With a gap insurance policy, there is no extra in your pocket - the policy just promises to pay off any remaining loan balance after the insurance settlement.
Too many borrowers don't learn what coverage they have until too late. Check your insurance type & amount and compare to your loan balance now, not after an accident. Or take the "sucker bet" advice and avoid the loan in the first place.
Linear Mode
