Insurance Company Offers Less Than I Owe

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) September 24, 2008 --

Texas law only requires that the insurance company pay for the fair market value of the vehicle, not the balance owed on the car loan. This can cause problems particularly for owners of newer vehicles, since there is a sharp decrease in the fair market value after a new car is purchased. Because of this drop in value, when a loan has been taken out to buy the vehicle, there is often a substantial period of time before the loan balance is less than the fair market value of the vehicle. During this time period, if the vehicle is totaled in an accident, the vehicle owner is not only left without a vehicle, since the fair market value of the vehicle is paid to the lien holder - the bank or loan company - but the vehicle owner is also left owing money to the bank or loan company, and is without funds to buy a new vehicle. For this reason, it is a good idea to purchase "gap" insurance, which applies in exactly this situation, and which pays for the difference between the fair market of the vehicle and the balance owed on the loan and the fair market value of the vehicle.

More information can be found online at http://www.johnson-law.com/insurance-offer-less-than-owed.htm

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