Auto Insurance Policy Anchorage Alaska
Reader’s Question:
I was renewing my auto insurance policy in Anchorage Alaska AK the other day and my agent was convincing me to get gap insurance. He also tried to sell me this last year when I purchased my car. What’s his game?
Cole
Anchorage, AK
All good insurance agents in Anchorage Alaska AK will suggest this to you, Cole. But, what he failed to do was to explain to you the benefits of having gap insurance and particularly why he was trying to sell you this additional coverage. I am assuming, Cole, that you purchased your through an auto loan, and you are on your second year of payment, correct? If this is wrong just indulge me on this as it will be much easier for me to explain gap insurance with this scenario.
I am sure, Cole, that you are aware that automobiles depreciate far too quickly for our convenience. Although this is completely logical if you think about it. You’ve used the car and therefore it is not in its mint condition anymore – so it has depreciated, right, even as we speak it is depreciating. Just for example, it was stolen or totaled tomorrow (definitely hope not!), then as required by your auto insurance policy, your auto insurance in Anchorage Alaska AK will have to reimburse you or pay you. You might wander where they’d base their payments from. It will be based on what is called the “actual cash value” of the car, and this is the depreciated value of your car prior to the incident.
Given that you have purchased your car through a loan, you still have to pay the full remaining balance of your car, based on its original value when you first bought it – an amount far greater than the actual cash value, and therefore less than what your auto insurance company will pay you. The gap or difference, will be shouldered by you, if you don’t have gap insurance. You see the purpose of gap insurance now, Cole? I hope I have piqued your interest enough for you to look at some quotes from this page.
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