The short story is if you have GAP insurance, you need to report an accident to your primary insurance within 5 days. If not, you could have your GAP claim denied, even though your primary insurance still covers the claim:
Looking for advice, insights, and if nothing else, posting as a PSA.
The long story is our 21yo daughter (a.k.a. "Crash Bandicoot") rear-ended a jeep last May. The jeep was essentially untouched and the other driver was fine with not reporting. Unfortunately it munched the front of her Fusion pretty good, but the car was still drivable and had no handling or mechanical problems. I've done some auto body work in the past and had zero reason to think the car would be totaled. So, checking our GAP policy was not a consideration. We also were hesitant to report immediately since she totaled her Sentra the year before, and was afraid she would be dropped. Two months later she was dropped by USAA anyway so at that time we did report. The damage was still covered, but she needed to save up $1000 to pay the deductible so that added more delay time before we could schedule time in a shop. She found alternate coverage in the mean time and we finally got the car into the shop 2 weeks ago, fully expecting it to be fixed. Instead USAA deemed the car a total loss paying a fair value for the car, but that still leaves $7k in loan balance. "No problem" we thought having GAP insurance...... WRONG!
While I have no problem with her taking on some negative equity to replace the Fusion with something cheaper, I'm afraid $7k negative equity will be too much for her to qualify for a loan in her name only. Other than her questionable driving skills, she is a responsible young lady and is developing a successfully cleaning business (which she needs a car for).
Here's what I replied to the GAP insurance sphincter this morning:
Still waiting on a reply but any advice, insights would be appreciated. Even if just telling us we're screwed.
Thanks,
Looking for advice, insights, and if nothing else, posting as a PSA.
The long story is our 21yo daughter (a.k.a. "Crash Bandicoot") rear-ended a jeep last May. The jeep was essentially untouched and the other driver was fine with not reporting. Unfortunately it munched the front of her Fusion pretty good, but the car was still drivable and had no handling or mechanical problems. I've done some auto body work in the past and had zero reason to think the car would be totaled. So, checking our GAP policy was not a consideration. We also were hesitant to report immediately since she totaled her Sentra the year before, and was afraid she would be dropped. Two months later she was dropped by USAA anyway so at that time we did report. The damage was still covered, but she needed to save up $1000 to pay the deductible so that added more delay time before we could schedule time in a shop. She found alternate coverage in the mean time and we finally got the car into the shop 2 weeks ago, fully expecting it to be fixed. Instead USAA deemed the car a total loss paying a fair value for the car, but that still leaves $7k in loan balance. "No problem" we thought having GAP insurance...... WRONG!
While I have no problem with her taking on some negative equity to replace the Fusion with something cheaper, I'm afraid $7k negative equity will be too much for her to qualify for a loan in her name only. Other than her questionable driving skills, she is a responsible young lady and is developing a successfully cleaning business (which she needs a car for).
Here's what I replied to the GAP insurance sphincter this morning:
Good Morning J***,
My apologies for the delay in responding.
You may be correct in your determination, but I have reasons to believe we have grounds to challenge this in court. It has been a long time since I took business law, but from strict business ethics standpoint, is it clear that disqualifying our coverage based on a technicality the consumer would not reasonably know, is misleading at the minimum.
From a business standpoint, I am failing to see how ******stone has been "damaged" by our failure to report the accident to USAA. Here the reasoning that I will be sharing with legal counsel:
#1: GAP insurance at the time of the accident was never a consideration since the damage was mostly cosmetic, and the car was drivable. We had NO REASON to believe the car would be declared a total loss, so we had NO REASON to check our GAP policy at the time.
#2: Based on reason #1, the true "time of loss" from a GAP perspective was when USAA declared the car a total loss.
#3: Our primary insurance honored the claim, without complaint, in spite of the delay in reporting.
#4: ******stone suffered NO DAMAGE due to said delay between accident and the car being totaled. If anything, delay would be to ******stone's advantage due to pro-rating normal time/mileage depreciation.
Whether using this "failure to report" tactic is ethical, or legal, will be a question for our lawyer. Of course, we may not have to meet either of those criteria. If he feels we have cause to sue, I can assure we will. Should it come to that we will be seeking compensation for legal fees, and rental car coverage at the minimum.
Thank you,
Still waiting on a reply but any advice, insights would be appreciated. Even if just telling us we're screwed.
Thanks,
