Auto accidents in Minnesota have significantly increased over the years. A car accident can lead to severe injuries, and in other cases, they may have serious financial implications on the owner of the vehicle. What’s more, if the car is declared a total loss after the crash, the insurance company can only pay up to the fair market value of your vehicle.
Unfortunately, the fair market value is not the value you paid for the vehicle. Instead, it is a lower value determined by the vehicle’s condition before the accident. As such, if you have an auto loan that is more than the fair market value, you will still be liable for the difference between the loan amount and the fair market value. This could result in hefty debts and leave you with no vehicle at all.
Having said that, there is a leeway to avoid having a hefty bill to pay. Putting it briefly, having GAP insurance after an auto accident in Minnesota can provide sufficient coverage and help you avoid incurring significant losses.
What is GAP Insurance in Minnesota?
Simply put, GAP Insurance stands for Guaranteed Asset Protection. In essence, Gap insurance offers coverage on the difference between the balance of a lease or loan due on a vehicle and the amount the insurance company pays if the car is considered a covered total loss.
What else Does GAP Insurance Cover in Minnesota?
Getting gap insurance for your vehicle in Minnesota can result in multiple benefits. This is true if the vehicle is loaned or leased and totaled in the event of an accident.
Some of the other things covered under the gap insurance include:
- Accidents
- Theft
- Fire
- Vandalism
- Nature damages
How can Gap insurance help after an Auto Crash in Minnesota?
Assuming you purchased a new vehicle from a lender and the loan amount on the car is $40,000. After successfully purchasing the vehicle, you are involved in an auto accident in Minnesota a few days later. The vehicle’s value would have depreciated, and the fair market value would most likely be approximately $35,000. This is the amount that your insurance company is required to pay, and you’ll still be liable for the remaining $5,000 on the auto loan.
This is where Gap insurance comes into play. In essence, the $5,000 difference between the loan amount and fair market value will be paid off by the gap insurance. Therefore, gap insurance provides you with proper coverage in the event of an auto crash in Minnesota.
When to Get Gap Insurance in Minnesota
You can get gap insurance from a car dealership immediately after purchasing a new car. At the same time, if your vehicle is leased, then the lender may require gap insurance.
Other situations where you may consider purchasing gap insurance include:
- If the car loan lasts for sixty months or more
- If the car depreciates in value to be less than what is owed on the loan
Having said that, getting gap insurance is an imperative undertaking, mainly because it provides you with the financial security you deserve in case of an accident.
What should you do after a car crash in Minnesota?
Although you may have purchased gap insurance before the accident, it is imperative to note that various issues may arise which can affect the amount paid by the gap insurance. Factors such as policy limits, deductibles, and facts surrounding the car crash are often considered before the Gap insurance can pay the amount.
Having said that, you should take critical steps after an accident to ensure that you get both auto insurance and gap insurance that covers all the losses after the accident. As such, it is vital to have an attorney by your side after an accident.
In essence, an attorney will :
- Safeguard your interests
- negotiate with the insurance company on your behalf
- Collect any relevant evidence and facts after the auto crash
- Ensure the insurance company covers all the losses.
Need help? Contact a Minnesota Auto Accident Attorney
At Patterson Dahlberg Injury Lawyers, we have experience handling auto accident claims in Minnesota. Our skills, experience, and knowledge of the jurisdiction allow us to achieve a favorable outcome for our clients.
Contact us today to schedule a free case evaluation.