If you are leasing or financing your car, you will want to consider getting gap insurance. Appropriately named, this coverage fills in the gap between what you owe on the loan/lease and the actual cash value in the event an accident results in the total loss of the vehicle. Some insurance companies offer gap insurance at no extra cost, meaning it is built into the coverage on your policy. Other carriers will charge a small amount to include this coverage.

How it Works

If your car is a total loss in an accident, the insurance company will pay you the actual cash value (ACV) of the vehicle. If this amount is less than what you still owe on the car, you will find yourself still paying for a vehicle that has been destroyed in an accident. Gap insurance solves this problem by paying the difference between what the car is worth and what you owe on the lease.

EXAMPLE: Your vehicle cost $32,000 brand new and after a year, you have driven it 30,000 miles and it is now worth $24,000. However after making a year of payments you still owe a loan balance of $27,000. The car is suddenly destroyed in an accident and the insurance company pays you the actual cash value of $24,000. You still owe $3,000! Gap insurance would pay this difference.

If you would like to protect yourself with gap insurance, select the coverage when you are shopping for car insurance quotes and it will be factored into your premium payments.

TIP: Make sure you understand all instructions on your gap policy. Some policies require you to continue paying all your payments until the car is paid off. This might mean that you pay your note even though your insurance company has not made a settlement on your vehicle.

Some leasing companies requires the lessee to carry gap insurance when you get auto insurance for a financed car. When you get financing for your car, be sure to ask if you are required to have gap insurance under the terms of your lease agreement.
If you have recently acquired a leased or financed car, you may have read in your agreement that you are required to carry car insurance. This requirement is the finance or leasing company's way of insuring their collateral: the leased or financed car.

Extent of Coverage

How much car insurance you will be required to have will depend on the company that leases or finances your vehicle. To make sure you get the proper coverage, you need to read your lease or finance contract and understand how much of the following types of car insurance coverage you will need:
  • Liability Coverage
  • Comprehensive and Collision Coverage
  • Medical Coverage
  • Gap Insurance
Your lease or financing agreement may require additional coverage. Be sure to find out what car insurance coverage you are required to have on your leased or financed car!

Forced Auto Insurance Coverage

If your car insurance is cancelled, the insurance companies will sometimes send the leasing company or finance company a notification of non payment or cancellation. This lets the leasing company know there is no longer a car insurance policy covering the vehicle. When this happens, the finance or leasing company will sometimes force insurance by taking out an insurance policy on the leased or financed vehicle that you will have to pay for.

TIP: This coverage can be expensive. In order to avoid paying a high insurance payment for a policy forced by the leasing company, do not let your insurance be canceled.
Gap Insurance

Your lease or financing agreement will likely require you to include gap insurance as part of your plan. Gap insurance is particularly important because it protects you, and your leasing company, if the car is totaled at a time when its actual value is less than the amount you still owe on the loan. If your car is a total loss in an accident, the insurance company will pay you the actual cash value (ACV) of the vehicle. If this amount is less than your loan payoff, then you will need to keep making payments on a car which you can no longer drive. Gap insurance solves this problem by paying the difference between what you owe and what the car is worth.

TIP: Even if your lease or finance agreement does not require gap insurance, you should strongly consider adding it to your policy. Gap insurance can save you a lot of money should your car be totaled in an accident.

To find an insurance agent in your area and to get a quote on your financed car or leased car insurance, click here and take advantage of the Free Advice quote center!
Most people start their search for car insurance by going online to their favorite search engine and getting quotes for a basic policy. While online car insurance companies offer easy, affordable, and adequate coverage there are times where you will have questions. If you need to know things like what liability coverage will work for you, or what discounts are available, or how to get help when involved in a car accident then you may want to consider talking with a car insurance agent.


TIP: You may decide that you don't need an agent, however, it is a good idea to explore what one can do for you before choosing your car insurance policy.


The Initial Conversation with a Car Insurance Agent


Establishing a relationship with an agent may be your best bet in getting the type of coverage you need at the greatest savings. A short conversation with a knowledgeable car insurance agent might uncover gaps in your car insurance coverage that you were unaware of, or help you find discounts on your car insurance that you didn't know were available to you.


As you talk with an agent, they will get information about you to better assess your car insurance needs. Among other things, you will likely be asked to provide details on your finances, marital status, driving history, how frequently you drive, and whether you are a student or in the military. As you work with your agent, they will be able to identify areas where you can save money, and areas where you may need additional insurance coverage. A good car insurance agent will help you flush out areas of need and give you the insurance coverage you need to manage your risks. And it is FREE!


TIP: Because it does not cost you anything, it is a good idea to have a conversation with an agent before making a car insurance decision. In addition to finding the best auto insurance coverage, an agent may be able to suggest insurance coverage for your possessions or home as well.


Your Continued Relationship with Your Car Insurance Agent


Once a good relationship is established with your agent, they can continue to assist you as your life circumstances and car insurance needs change by reviewing and updating your policy. Should you get married, have children, need to add drivers to your policy, or need to change your coverage to save costs, your agent will be available to talk to you and help you find the best policy to fit your new car insurance needs. Your car insurance agent can reduce the stress of adjusting your car insurance policy by doing all the leg work to find the best car insurance coverage.


Should you have a car accident, your car insurance agent will be your first point of contact. Since you have a relationship with that person, you may find that the process of filing a claim and reaching a settlement is smoother and more comfortable. Your car insurance agent will try to make the process easy and quick so you can recover your damages and get back on the road.


TIP: Although your agent will be friendly and helpful during the auto insurance claim process, remember that they work for the insurance company, and NOT for you. Your agent's primary interest is saving your car insurance company money and time, even when helping you with a claim. This is not to say they are going to deceive you or take advantage of you, but it is smart to carefully, and objectively, review any settlement offer you receive before accepting.

Your priority should be getting a fair settlement, not maintaining a good relationship with your car insurance agent. Contact a car accident attorney if you have any questions about the claim settlement process.


Choosing Reputable Car Insurance Agent


Most agents are licensed by the state in which they sell insurance. Further education including insurance designation such as CIC (Certified Insurance Counselors) or CPCU (Charter Property Casualty Underwriter) signifies that the agent has furthered his or her education in the field of insurance giving them the expertise to help you with your risk management. In order to find the most qualified agent, you are free to ask to see the agent's license and certifications before talking with them.


Ultimately, the decision to purchase car insurance online or from a car insurance agent is up to you. If you do not feel the need for a personal touch from your car insurance, then you do not need an agent. On the other hand, if you like the idea of having a point of contact, and source of information, then you will be better served with an agent to help. If you are looking for a reputable agent in your area that could provide you with a quote on your car insurance as well as discuss the possibility of other needs, click here to visit the Free Advice quote center.
If you have received an auto insurance cancellation letter or non-renewal notice, your insurance company is notifying you that they will not be renewing your auto insurance policy on its scheduled renewal date. Non-Renewal is the insurance company's way of canceling your auto insurance. Here are some of the reasons for auto insurance cancellation:
  • Too many tickets, accidents, or violation in a given period.
  • A driver in your household who is not listed on your policy
  • Company finds a material misrepresentation on your application that was provided to get auto insurance coverage.
  • Company has decided not to provide coverage to your county or state.
  • Suspension or revocation of your driver's licenses

KEEP IN MIND: Whatever the reason for your insurance being canceled, you will be without auto insurance unless you secure another auto insurance policy by your non-renewal date.
Car Insurance Grace Period

Individual state law govern what process a company must follow if they want to cancel/non-renew your coverage and whether a reason for the cancellation or non-renewal must be given to the policy holder. In the event of a cancellation or non-renewal, the company must mail a notice to the policyholder. States vary on the advance notice required, which can range from 10 to 45 days. If you acquire coverage from another insurance company during this time, your policy with the first company needs to be cancelled. In some cases, your new company will offer to send the cancellation notice for you. If you cancel your policy before your cancellation date, you are entitled to a refund of the unused portion of your premium. 

KEEP IN MIND: When you sent your cancellation notice, note where you would like for your refund to be mailed if it is different from your policy address.
Car Insurance Late Payment

The most common reason for auto insurance cancellation is non payment of premium. If you miss a payment the company will generally give you a time to come up with the current shortfall, or allow you to reinstate your coverage. However, the truth is, unlike homeowners policies which generally allow for a 30 day grace period to make premium payments, most insurers can cancel auto policies immediately for a late car insurance payment if allowed by state law. Check the law in your state to see what grace periods are allowed. The National Association of Insurance Commissioner's (NAIC) website provides links to state insurance departments. Look under consumer information to see whether your state provides a grace period.

Most insurers won't cancel your policy for non-payment if it is a one-time occurrence because they want your business, however if you are chronically late, your insurer may take this opportunity to cancel your policy.

TIP: Do not give your insurance company further reason to cancel your insurance policy. An insurance company will not hesitate to cancel a policy due to a late car insurance payment if you've become a high risk due to speeding tickets, numerous accidents or other violations.
Cancellation of Auto Insurance and Bad Credit

Being cancelled for non-payment of premiums may also earn you a bad credit score and cost you more on future policies with other insurers. Most insurers use credit scores to assess their risk. The lower your credit score, the more you will pay for insurance. If you don't have the money to pay your premium, contact your insurer immediately and see if you can work out a payment schedule. A bad credit score will follow you from insurer to insurer and could leave you without insurance altogether!

TIP: Many insurers allow for online payments that can be automatically deducted from your checking and savings accounts. If you are a chronic late payer, take advantage of these new resources to avoid cancellation of non payment and bad credit.
What to do if you cannot find auto insurance

If you receive an auto insurance cancellation letter, start looking for replacement insurance right away. For those individuals that cannot find replacement insurance, States require that a handful of companies provide an assigned risk policy. All States have some form of Assigned Risk Coverage. These policies are usually no different in coverage and they must at least provide the minimum liability limits set by that state. It can be pricey as an assigned risk policy can double the cost of an average auto policy, however, it will give you the needed auto insurance coverage required. 

TIP: If you think you need assigned risk coverage, call several carriers and let them know up front about your driving record so they can let you know if they are able to provide you with a high risk policy that will meet your needs. Some carriers may not be able to provide you with coverage, but can refer you to another company that can. Also, check with an insurance agent or ask your state insurance department about how to get assigned risk coverage.
If your car accident claim arises from a small case with minor injuries, low medical bills, and no extenuating circumstances, then you may want to settle the claim yourself. If you're determined to handle your car accident claim by yourself, then you will need to know what you need to do in order to get a fair settlement. Settling car accident claims is easier if you are prepared!

TIP:A word of caution if you are handling your own car accident claim: car insurance adjusters have the education and training required to value a car accident, and their job is to save money for the insurance company by settling car accident claims as quickly and as cheaply as possible. If you find yourself over your head, contact a car accident attorney for assistance.

Settling Your Car Accident Claim

When you settle a car accident claim, you will work with a claims adjuster hired by your insurance company. The claims adjuster will evaluate your claim and give you an initial settlement offer. Although the offer will likely be low, it is usually on the low side of a reasonable range. If you do not think the settlement offer is fair, you do not have to accept it. If you reject the offer, you begin the process of negotiating with your claims adjuster to increase the value of your settlement.

Throughout the car accident claims process, provide the adjuster with all of the information she has requested, along with any other documentation that might affect the value of the claim, so she can negotiate with you based on the best evidence that supports your position. Make sure you finished all treatment and have copies of all your bills and expenses incurred before you enter into car accident settlement discussions.

TIP:If you are handling the auto accident claim yourself, don't rush! Time is not usually an issue unless the damage is serious, so go slowly and negotiate wisely. Don't jump at the first offer. When negotiating come down very gradually, allowing the adjuster to come up.

Find Your Auto Accident Claim Value

Before you start negotiating, it is critical that you know how what your auto accident claim is worth. Add up all your bills, cost for any prescriptions, lost wages from work and any other cost you have incurred as a result of the auto accident. A good amount to ask for when settling your auto accident claim is usually two to three times your cost incurred, however, there are circumstances were you can get more. A consultation with an auto accident attorney will let give you an idea what you are entitled to receive. Most consultations are free and this free advice could be invaluable. Contact an accident attorney in your area for more advice.

TIP:When handling an auto accident claim for yourself the most important thing to know is when you should contact an attorney. A claim may start out straightforward, but get complex in a hurry. Knowing when to seek legal help can make a significant difference in how much money you recover.
Know How to Write an Insurance Demand Letter

If you would like settle your car accident claim alone, it would be prudent to draft an insurance demand letter that makes clear the reasons you should receive your full car accident claim amount. Attach all the supporting documents that prove the value of your car accident claim, and explain why each is important. You don't need to be a great writer to draft a demand letter, and if you need assistance, click here for a sample auto insurance claim demand letter to send your claims adjuster.
If you have any questions about making an adequate demand, or writing a demand letter, click here to find an attorney in your area to assist your claim.
Did you just get a car insurance renewal notice in the mail? Are you thinking about canceling your auto insurance because your insurance premium just went you up? You are not alone. Many consumers are looking for ways to save every penny, and cutting costs by changing your auto insurance coverage can help you. Below you will discover how asking a few good questions when deciding to change you car insurance policy could mean big savings for you!

Using Renewal as an Opportunity to Review and Change Your Car Insurance Policy

Like every contract, your auto insurance policy will expire after a certain period of time. When that happens, you have an opportunity to save money on car insurance by attempting to renew at a lower premium or change your car insurance plan. The process of renewing your car insurance can be done very easily and quickly, and if you do not take the time to properly review your current auto insurance policy beforehand then you may miss a chance to get a cheaper policy by adding car insurance discounts or finding other ways to reduce your premium. When you are facing a renewal, take the time to do the following:
  • Know when your renewal is, and take action at the right time: if you try to cancel or change your auto insurance plan after the time to renew has passed, you may have to a pay a fee
  • Know what you pay for: Read your current auto insurance policy, and have copies of your bill so you can identify what you are paying for and ways you can cut your costs.
  • Get some auto insurance quotes prior to your renewal: Take some time and get auto insurance quotes so you can see if renewing with your auto insurance company is your cheapest option. You can also use some competing auto insurance quotes to get a lower price out of your auto insurance company.
    • TIP: Make sure the auto insurance quotes you are using as a comparison offers the same type of auto insurance coverage you want out of your policy when you renew it, otherwise the comparison is not valuable.
  • Don't get attached to an insurance company: Insurance is always about money. Your insurance company evaluates you based on how likely you are to be profitable to them by paying your premiums and not filing a claim. They do not evaluate you (or the cost of your policy) based on how well you get along with one of their agents.
    • TIP: The other side of the money is how difficult your insurance company makes it to file a claim or collect a fair settlement. Do some research online to see what companies have the best claim payout service, and factor that into your decision.
Canceling Your Auto Insurance

So you have done your homework and decided not to renew your auto insurance, because you found a new insurance company that is offering you the same coverage for a lower premium. Canceling your old policy is simple - call the present carrier or agent and advise them you would like to cancel your policy. Always follow this phone call with your request for cancellation in writing.

Canceling your Auto Insurance Policy Early

If you are canceling your present policy prior to your auto insurance renewal date, you could be hit with a short rate penalty. This penalty could be as much as 10% of the remaining premium left on the policy just for canceling your policy prior to its renewal date. If the overall savings for your new policy is far greater than this penalty, changing mid-term makes sense. Changing policies for a savings of $70 over six months with an early cancellation penalty of $90, however, may not make sense. In this case, wait for your renewal date and then make the switch. If you are canceling your car insurance policy prior to your renewal date, make sure you know of any fees your old company will require you to pay.

Insurance Company Non-Renewal

If you have received an auto insurance non-renewal notice from your insurance company, they are notifying you that they will not be renewing your auto insurance policy on its scheduled renewal date. Non-Renewal is the insurance company's way of canceling your auto insurance. This could happen for various reasons---too many tickets, accidents, a youthful driver not reported in your household or the company themselves have decided not to provide coverage to your county or state. Whatever the reason, you will be without auto insurance unless you secure another auto insurance policy by your renewal date

Whether you are choosing to cancel or renew your auto insurance policy at the end of its term, take the opportunity to get competing car insurance quotes. The end of your auto insurance policy can be a chance for you to get lower premium payments going forward.