I recently bought a pick-up and the dealership wanted to sell me gap insurance. This is insurance that is supposed to pay the difference if you owe more on the vehicle than you receive from you insurance. So they basically pay the difference.
It sounded good so I decided to purchase the gap insurance. As you can see in the picture, I rolled the pick-up and it is a total loss. I contacted my insurance and they did their part with little hassle. However, the gap insurance is a different story. They basically said that I need to provide them with all of the documentation they ask for within a certain time period. They need documents from the lender, police report, insurance company, dealership……are you serious. There is more paperwork involved with this than buying a home! Then I guess they decide if they will pay it or not. I’m not sure how that is going to work out because I am still gathering the required paperwork.
So if you are considering gap insurance, know that there is a lot of work that goes with it if you should need it.