Expert: Richard Hixenbaugh - 11/11/2010

Question
Dear Richard,
Thank you for taking the time to read my question.  I totaled my 2008 Toyota Prius in a not-at-fault accident ten days ago in Atlanta, GA.  My auto financing was originally through the Toyota dealership, at which time I bought a Total Loss Protection Plan for $800 from an independent insurer.  A couple of months later I financed through a different lender for a better interest rate, and I kept the Gap policy.  I am glad to have the GAP coverage, as there is an upside-down balance.  Just yesterday I was informed by my current lien holder that a free Gap policy had been applied to my loan when I switched to them, and it would be applied to my unpaid balance.  They advised me to file a claim with the other insurance company as well.  So essentially I have two Gap policies on the same car.  Is the original company obliged to pay a claim on the full unpaid balance as well?  (My current lien holder has already advised me they will cover the entire unpaid balance.)  Thank you again for your time.  
Jim

Answer
Hi Jim,

Since you have 2 GAP policies, you should file the claim with both. However, you shgould know that each company will pay half of the amount needed to pay of your loan. They will not each pay in full with a balance going to you. Your primary auto insurance will pay the value of the car and the GAP policies will coordinate payment of the balance.

I hope this helps
Richard Hixenbaugh