Auto finance company and gap ins in conflict?

Car was totalled in June of this year. I have full coverage and gap insurance. I took all necessary reports and documents to Nationwide, who paid what the car was worth. That left me with 1500 remaining on the loan balance. Gap sent a letter saying they would pay but my finance company said they haven’t. In addition, I’m now being charged late fees for that 1500 remainder. Help I feel like I’m getting the run around from someone and I don’t know how to find out who is at fault here.

Asked on October 12, 2017 under Accident Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Ask the insurer to send you proof that they paid the financing company; if they do not do so or keep insisting that they "will" pay in the future, inform them that you will sue them for breach of contract if necessary for all amounts you owe (including late fees, interest, etc.) due to their failure to honor their contractual obligations. (The GAP policy you purchased, like all insurance policies, is a contract, and is enforceable in court.) If they still don't pay and provide proof of payment, then file a lawsuit; in the lawsuit, ask for punitive damages too, for their willful and wrongful failure to obide by their obligations. (You probably won't get the punitive damages--courts rarely give them in contractual cases--but on the other hand, you will definitely not get them if you don't ask; you may as well therefore ask, on the chance you will get the extra money.)
If they do provide proof of payment, keeping a copy for yourself, send proof to the financing company, sent some way you can prove delivery.

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