Do You Need Gap Car Insurance In Georgia?
If you don’t have the patience to read my post, then check out this video from YouTube about gap insurance. It does a pretty good job at explaining why you may need to add gap insurance coverage to your Georgia car insurance policy. If you’re still confused, let me break it down for you.
- Gap insurance is…
Gap insurance is the type of coverage that you add to your car insurance policy to fill the gap between the actual cash value of your car and the amount that you actually owe on it. When you total your car, the amount that you own on it isn’t taken into mind when calculating what your claim payment will be, so this can be very important.
Right now I’m making payments on a 2007 Chrysler PT Cruiser. We owe about $16,500 on the car right now, but it’s only worth around $12,000. If we were to total that car today and we didn’t have gap insurance, then after our claim payment came through, we would be without a car and we would still owe over four thousand dollars on our car.
- Who requires it?
Gap insurance is only necessary to add to your insurance coverage if you’re still making payments on a car. Most of the time, your financer or car dealership will require you to purchase gap insurance much like they require you to purchase comprehensive or collision insurance on your new vehicle. They do this to protect their investment.
In order to buy gap insurance, your insurance policy must already have collision and comprehensive coverage on it. You cannot purchase gap insurance otherwise.
The reason why people need gap insurance is because, unless you put a sizable down payment on a new car, then in the time soon after you have bought it you will be in an upside down loan, which means that you will owe more than the car is worth. This happens because new cars depreciate very rapidly.
What Determines Your Auto Insurance Rate in Georgia?
Reader question:
How do car insurance companies determine my auto insurance rate here in Georgia?
Paul
Thank you for your question, Paul.
There are so many factors that go into a single Georgia auto insurance quote, that I can’t even begin to address them all in a single post. A few decades ago, the factors could be counted on the fingers of one hand, but each year the process grows more complex. What I can do, though, is tell you about one thing that auto insurance companies look at to determine your insurance rates.
- Your CLUE report.
The majority of policy holders don’t have anything on their CLUE report, and this is mostly because the information only remains there for ten years. Unlike credit, which most of society uses constantly, the average insurance claim is filed only every half a decade or so.
The CLUE report is not connected to you yourself, but, much like your auto insurance policy, is connected to your vehicle. The CLUE report will have information on any past claims and repairs, and when you get a new car you can purchase a copy of your CLUE report from ChoicePoint. Since it does affect your insurance premium, it is probably a good idea to buy a CLUE report before you finalize the purchase of your car.
Like a credit report, sometimes CLUE reports contain mistakes. If you see one, you should contact ChoicePoint to have the offending note removed. This takes less than a month in the majority of cases. Unlike a credit report, though, if you have some information that would make your CLUE report look better, such as the installment of an anti theft device, then you can have that added to the report, making your auto insurance rates go down.
- Your CLUE report and your GA auto insurance company.
Once you are already with a company, they will almost never check your CLUE report again. Normally, these reports are looked at when you are getting a policy with a new insurance company.
The CLUE report will not be used the same across the board by every insurance company, but the number of claims you have on it will certainly determine whether your rate goes up or down.
Cheers,
Fashun Guadarrama.
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