I had a car stolen on Dec24,2011after being stolen it was wrecked and totaled…. I had full coverage and gap so doI owe January note???

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 6, 2012

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Insurance Question from Ashwood, MS

Asked on 02/06/2012

I had a car stolen on Dec24,2011after being stolen it was wrecked and totaled…. I had full coverage and gap so doI owe January note??? The finance company claims I owe January 12 payment when the insurance payed off on January 9 and the gap paid about two weeks later...

Answer given on February 08, 2012

This depends on a few things.  Does January payment pay for December or does it pay for the month in advance?  Was there anything left over after the total loss check by the insurance company and the gap insurance? Is the January payment a full payment or just partial interest for a few days?  Normally, the total loss check will cover the Actual Cash Value (ACV) of the car.  This may not completely pay off the loan. This is where gap insurance comes into play. Fortunately, you had gap insurance which paid off the difference between what was left on the loan and the total loss check for the car.  Now they are saying you still owe for January 12 payment.  If the total loss of the car was paid after the payment date for December was due, then it is possible that the January payment plus interest is still due.  However, the gap insurance should have paid off the rest.  Contact your bank or company that your car loan was with and request a print out of the loans payment history.  This should even show the payment the insurance company made along with the payment from the gap insurance. Ask them to explain the January payment and how you still owe this amount when gap insurance should have covered the remainder.  Read our article on Gap Insurance for My Car as it may help explain the overage.         

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