Choosing The Right Health Insurance PlanChoosing The Right Health Insurance Plan

About Me

Choosing The Right Health Insurance Plan

Hello, my name is Eric Coleman and I've written this blog to inform others about health insurance. Purchasing this type of insurance can be confusing, but it is very important that people know exactly what their insurance policy covers. When I was ready to purchase my health insurance, I didn't have any idea about what type of coverage I needed. Before I visited an insurance agent, I did hours and hours of online research to learn insurance terms and to find out about the kinds of policies that are available. The insurance agent also answered my questions so that I would fully understand what I was buying. Since getting the right health insurance is so important, I decided to write this blog to help others understand what type of policy they need and what is covered.


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Minding The Gap: Who Needs To Include Gap Insurance In Their Automotive Coverage?

With new cars rising in price and longer financing terms being offered by dealerships, it's important to understand the importance of gap insurance. Gap insurance is an addition to comprehensive and collision insurance that pays for the difference between what you owe on the car and its actual cash value. Normally, your auto insurance company will only pay you what your car is worth when it is totaled in an accident. However, you're personally responsible for paying the dealership the full amount of money you owe on the car. When you owe more on your car than it's worth, you'll have to pay money out of your own pocket in order to make up the difference. If you have gap insurance, your auto insurance company pays this portion instead.

Who needs gap insurance? Here are a few situations in which purchasing gap insurance is a very good idea in order to protect you financially — if you don't have it, you're at risk of having to pay a substantial amount of money to the dealership if your car is in an accident.

You Put a Lot of Miles on Your Car

Whether you have a long commute or drive far distances on the weekends, putting more miles on your car will cause it to depreciate faster. Your car payments won't be able to keep up with the amount of wear and tear you're putting on the car, which causes you to owe more on your car than it's worth. Drivers who rack up a lot of miles on their cars should definitely consider purchasing gap insurance in order to make up for the increased depreciation.

Your Financing Term Is Four Years or Longer

While a long financing agreement with a dealership helps to keep your monthly payments low, it also means you won't pay down on the amount you owe as quickly. This increases the chances that you'll owe more on your car than it's worth, especially during the first three years. If you will be making payments on your car for more than four years, you should consider protecting yourself financially by purchasing gap insurance.

You Traded In Your Last Car With Negative Equity on Your Loan

If you owed more money on your last car than it was worth, your dealership may have offered to roll that negative equity into your financing agreement when you traded it in. This immediately increases the amount you owe on your new car past its sticker price, which increases the chance that you'll end up underwater on your auto loan. If you rolled the negative equity on your last car into your current auto loan, it's a good idea to consider purchasing gap insurance.

On a final note, many dealerships will offer you gap insurance as part of your financing agreement. They include the cost of gap insurance in the total amount you owe on the car. In most cases, you'll get a much better deal on gap insurance when you purchase it from an auto insurance carrier instead of purchasing it through your dealership. Keep this in mind when you're buying a new car, as you can often save money by using an auto insurance company for your gap insurance.

If you don't currently have gap insurance and you owe more on your car than it's worth, consider protecting yourself financially by contacting an auto insurance company and asking about their plans. Gap insurance is very inexpensive and can protect you from financial disaster if your car is totaled and you can't cover the difference between what you owe and what the car is worth.