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Everything You Need to Know About Gap Insurance

While buying a home tends to appreciate in value overtime, buying a vehicle is the opposite. Especially if you are buying a brand new vehicle, the moment you drive off the car dealership’s lot, your vehicle has already depreciated in value. For many vehicles, the more expensive the purchase, the faster the depreciation. New vehicles offer more safety features and conveniences, so we understand why people like them.

If you are financing or leasing a vehicle, you may benefit from Gap Insurance.

Imagine this scenario: While out enjoying your new car, you hydroplane and hit a guardrail damaging your new vehicle beyond repair. The insurance company is telling you that your new car is a total loss. If your car is totaled, that means it will cost more to repair it than the car is actually worth because of depreciation.

Gap insurance acts as additional car insurance coverage that will pay off your loan if your car is totaled or you owe more than your car’s new depreciated value. This coverage is usually limited to 25% of your vehicles actual cash value at the time of loss. Check with an agent about specifics for your company. 

What does your car insurance cover if you’re in an accident?

When you lease or finance a car, many lenders require you to have collision and comprehensive insurance coverage on your vehicle until you have paid off your car. If your vehicle was totaled, your insurance company will only pay what it is worth, not what you owe. This is what creates a gap between your current loan balance and what your car is actually valued at today.

Is gap insurance for you?

It depends how much you owe on your vehicle & if you could afford to pay the difference if your car was totaled. Let’s say you bought your car for $20,000. Over the course of your ownership, it’s now valued at $13,000. You currently owe $17,000 on your loan but were recently in an accident where your vehicle was totaled. Could you pay for the $4,000 difference out of pocket? Keep in mind, if you bought a luxury car, they can lose as much as 60% of its value over the course of five years. You may have an even bigger gap between your loan balance and current value of your vehicle.

Options for gap insurance: There are two options for purchasing gap insurance.

  • It can be purchased from the dealership or through an insurance agent. If you choose to purchase gap insurance through the dealership you purchase your vehicle from, the gap insurance will be built into your loan. The average price for gap insurance from a dealership is around $1,000, but add interest and taxes and it can add up to much more.
  • If you choose to purchase gap insurance from an insurance agent, on average it would add less than $10 per month to a policy! There may be certain stipulations associated with a gap insurance policy:
  • The loan may need to be through a financial institution rather than an individual.
  • Your current auto insurance policy may need to include Collision and Comprehensive coverage.
  • Your claim may need to be a covered Collision and Comprehensive coverage event.
  • Your vehicle may need to be determined as a total loss.

Before you purchase a new vehicle, make sure to check with your licensed insurance agent in to see how you can add gap insurance to your new vehicle policy.

The local, independent agents at Heuer Insurance Agency, can assist you with adding or amending an existing policy or setting you up with a new policy. Our years of insurance experience can save you a bundle. You can also visit our insurance website 24/7 to learn more about auto insurance or the other insurance products they offer like classic car or home insurance.

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4 Things You Should Complete in the New Year for Your Insurance

The start of a New Year always energizes us to start off on the right foot. Whether it’s committing to spend more time with family, exercising more or saving money, New Year’s resolutions are common for everyone. But, what about your insurance policy? Is there something you can do at the start of every year to save money or keep yourself fully protected? We share four items to complete.

Actually Complete a Home Inventory Checklist

Sure, this is always easier said than done. But it doesn’t take as long as you may think. Plus, you would regret NOT doing this if you experience a disaster in your home. You can start by taking pictures of each room in your house. Always include your big ticket items like jewelry, art, electronics, antiques, furniture and anything else you highly value. Get into the habit of taking a picture of your receipts for big ticket items too. To keep your home inventory list safe, store it on the cloud or save your documents on a zip drive that’s stored safely.

Keep In Touch With Us

Always keep us up-to-date with your life changes. Are you driving less? Did you remodel your home to add value? Did you purchase big ticket items? By keeping us in the loop, we’ll keep your insurance policy updated, make sure you are fully covered and may be able to find additional discounts.

Ask Us Questions

When you use a local insurance agent instead of purchasing insurance online, you get guidance and professional advice. Do you know exactly what your insurance covers? If you want the cheapest insurance plan, you may not realize what risks you’re taking by opting for less coverage. We never want you to be surprised if you have to file a claim and find out you’re not covered. Did you know if your home experiences a flood or an earthquake, you would need a separate policy to be covered? Continuously ask us questions. You should always know what you are and aren’t covered for with your insurance policy.

Always Ask Before Shopping Around

Did your auto insurance increase $300 this year? It’s normal to think you need to shop your insurance elsewhere. However, being a local insurance agent, we have MANY insurance companies to quote from and it may be as simple as asking us to shop around for similar coverage with other companies. Let us do the shopping for you! As an independent insurance agent, we can review your coverage and ensure you have the best company for your current situation.

By following the four topics above can keep you informed and prepared for any unfortunate situation.

Heuer Insurance Agency in Sparks has worked with a variety of clients in the Reno area over the years and we are confident in our ability to meet your personal or business insurance needs. We understand how important an insurance policy can be and we take time to match each of our clients with the perfect insurance policy. Whether you are looking for auto insurancerenters insurancehomeowners insurance, or life insurance we can help you. Not only can we provide you with each of these personal insurance policies, but we can also help you find a general liability policy, workers compensation policy or commercial building insurance policy. Give us a call at 775-358-5554 or visit us.

We’re on to 2018

Happy New Year to the best clients an Insurance Agency owner can have! THANK YOU for your continued loyalty and patronage! We hope your holidays were as spectacular as you had hoped for and your entire family is safe and ready to take on 2018. As we decompress and reflect on the holidays we want to send a special thank you to our team, clients and company partners. Thanks to you all we were able to donate $500 to the Veteran’s Guest House and filled TWO Food Bank barrels well over the top. A few years back we decided to forgo our inner office gift exchange and instead decided to give back and we haven’t looked back since.

With the new year here it’s time to get back to work and cross your T’s, dot your I’s and spend a few minutes reviewing your insurance program. Did you buy or receive any valuable items that we might need to specifically insure on your homeowners policy? What about a new RV, ATV, UTV or anything unusual? If you are concerned, call your friendly agents at HIA and let’s talk about it. We want everyone to have the exact amount of coverage you need while having all of your assets protected adequately. We can’t say it enough, “AFTER a loss is a terrible time to figure out what kind and how much insurance you have”. Let’s make sure ahead of time that you are buying just what you need, and no more.
Here are a few examples of the conversations we should be having. Insurance can be confusing, let us make it easier for you.
1) We can help you understand the difference between market value and replacement cost for any of your property policies, whether it’s your home or rental property.
2) We can help you decide how much coverage you really need based upon some pertinent facts about your property. We can show you how the cost to rebuild is quite often much higher than the cost to buy the house when it was new. Confused? Interested to learn more? Call us!
3) Concerned about the traffic in Reno/Sparks area? We are too! Do you have the right deductibles in place and the right amount of liability insurance to protect you on our roadways?
Lastly, don’t forget to refer your friends and get in on the referral drawing for some “FUN MONEY”! Anytime you refer someone to us we will send you a Starbucks gift card. If we get the opportunity to quote the person you referred we will enter your name into our monthly $100 VISA Gift Card drawing. Like us on Facebook too, and above all, remember to read the blog because we try hard to keep them short, simple and thought provoking. If there’s a topic you’d like us to write about please let us know. We’d be happy to write on it.