Expert: Richard Hixenbaugh - 7/24/2010

Question
Hi Richard. I hope you can tell me how an insurance company can sell gap insurance to me when the car was paid for in full by me at the same time I got insurance for it .I bought it new with cash ,I had my other car deleted and this one added . They knew I needed replacement insurance because there was no lien holder. I did not know there are 2 different kinds of insurance,How is it legal to sell me a product they know I can not use?

Answer
Hi Holly,

I can not answer how they can sell a product you can not use. You should call the company and explain the situation and demand that they cancell the GAP policy back to its inception and refund 100% of the premium.

To my knowledge there is no such thing as replacement coverage on an auto insurance policy that lasts through out the life of the vehicle. There are some companies that offer this but only up until the car in 1 year old. After that they pay the depreciated value of the vehicle.

If the insurance company will not refund your money, you should file a complaint with your state insurance commissioners office. If that does not help you will need to seek an attorney to file suit.

I hope this helps
Richard Hixenbaugh