How does gap insurance work after a car is stolen?
As everyone knows well, cars tend to lose value very quickly. They deprecate as soon as they leave the lot. If you ever decide to buy a car on loans you should be aware of the risks involved with it. In case your car is stolen or totaled, the interest you pay for it will be based on the value you initially paid and not the value of the vehicle. To avoid paying such an astonishing interest rate you should make sure your car is covered by GAP insurance. GAP insurance will cover the difference between the amount you pay and the actual value of your vehicle for you.
The procedure to follow when your car is stolen.
According to statistics, in Canada, a vehicle is stolen every 15 minutes which is a good illustration of the real scourge that thousands of motorists face each year. Here is the procedure to follow in the event of a car theft.
Call the police
First, make sure it isn't a distraction error and that your car has actually been stolen. If this is the case, contact the police immediately. The agents will complete a report and give you the number. Keep it in a safe place: it will be essential for the rest of the procedures.If your car is equipped with a tracking system (eg Boomerang) or a telematics installation (eg Mobiliz, Ajusto), contact your supplier. They will be able to quickly locate your vehicle. However, if your car is on the move, let the police stop the thieves.
Contact your insurance company
As soon as you can, call your insurance company right away to inform them of the theft and give them the police report number. After that, your insurer will take it from there and determine the actual value of your vehicle and calculate the amount you still owe on your vehicle loan.
Acting as fast as possible is the crux of the matter in this kind of situation as insurance companies usually have different rules for the deadlines of notifications and reports for stolen or totaled cases.
How does GAP insurance work when your car is stolen?
If you followed the tips above in the unfortunate case your car was stolen, an agent from your insurance company will get in touch with you to discuss your current situation and assist you with issuing a claim. The insurance company will then initiate the indemnification process according to the terms set out in your contract. For example, if the amount allocated for the replacement of the vehicle is $20,000 and you have opted for a deductible of $500, you will be compensated for an amount of $19,500. However, be aware that the insurance company can wait for a period of 30 days before paying the compensation in order to give the police the necessary time to try to trace the vehicle. Following this waiting period, you will receive compensation which will allow you to choose a new car. The insurer is required to issue the reimbursement on behalf of the owner of the vehicle and the creditor or lessor, if applicable.
Special cases of theft
Items or goods that are permanently attached to your vehicle which were on-board at the time of the theft are usually also covered by your insurance contract. Such items (ex, GPS, bicycle racks, baby seat, etc) will be reimbursed to you according to the terms of your auto insurance policy. Be aware, though, that items which are not exclusively part of your car, such as camera, phones and laptops are instead covered by your home insurance.
Some tips to avoid auto theft
Get your GAP insurance today!
Stolen and totaled cars are no strangers to any car owner. Losing your brand new car in an unfortunate event can be quite devastating. Having to also continue to pay full price loan for it is literally rubbing salt into the wound. GAP insurance can help you save potentially thousands of dollars. Don’t wait for the accident to happen but be always prepared in advance.
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