For context, I’m in Oklahoma. I got into an accident with my 2024 Toyota Corolla (not at fault), but there’s a lot of negative equity on it due to rolling over money from my previous car loan. The car is a total loss and has gap insurance. It’s worth around 28k, but my loan balance is 40k. Do you think the gap insurance will cover the whole amount? I know I wasn’t smart about signing the lease, so please go easy on me. Thanks!
Update: Thanks for the replies! I called Toyota, and they said they cover up to 200%. The car has only 8,000 miles and was in mint condition except for the back frame being destroyed, so I’m hopeful they’ll cover everything!
Make sure to read your specific gap contract to see what it doesn’t cover. Look for sections on exclusions or equity; they usually explain it in clear terms.
It’s possible they won’t cover the full amount. The policy might limit the payout or exclude negative equity from a previous loan. As mentioned, check your policy for specifics.
Double-check your gap coverage policy. There’s gap waiver coverage (usually through your lender) and gap insurance (typically through your insurance company). Gap insurance often has a cap. Gap waiver might cover the loan entirely.
Also, watch for exclusions related to negative equity from the previous loan. Review your gap coverage paperwork to know exactly what’s covered.
Val said:
I googled it, and it seems that’s what gap insurance is for, so hopefully you’re covered. Good luck! But I’m sure others will say I’m wrong.
What Google says doesn’t really matter. It depends on the policy terms. Some gap policies don’t cover the negative equity rolled over from a previous loan.