Gap insurance

Any feedback on gap insurance? We have State Farm and they don't offer it. The dealer said to buy from the insurance carrier. This is a new FF and so we want to have that added coverage. Better carrier maybe?

 

"State Farm and Progressive" are what I was told when I asked the dealer. Up to what value does State Farm cover? I have called a few insurance companies and was told that most cover only up to $150K. That makes insuring cars like that somewhat tricky.

 

"gap" insurance is typically attached to closed-end leases; most manufacturer lease programs include it as part of the deal. Essentially, it covers the "gap" between the actual market value of the car and the actual payoff amount. I know a few firms used to offer it (eg. Farmers) years and years ago, but haven't seen/heard much about it.

If you own the car outright, or have financed it, or have an open-ended lease, particularly for a high-end (expensive) car that is going to depreciate hard (eg. FF) or see a big value hit for a ding (eg. a Ferrari) then you should look into Agreed Value Coverage.

there's been quite a few threads on here about this, though probably twice as many threads about people looking for the lowest insurance price....which hopefully won't bite them if something ever happens.

FWIW, important safety tip, even if you've known your agent for 20 years, question them hard and get things in writing, and read the policy details....most "typical" agents are not familiar with policy exclusions and issues around certain assets (eg. Ferraris, art, et al). No ding to the insurance agents out there, but it's been my experience.

There are quite a few specialty insurance providers that offer agreed value, personally we have our coverages through AIG Private Client Group, the coverage and service are impeccable. Of course, it's a bit more expensive, but now unfortunately having been through a couple claims, it's been well worth it.

 

It's been my understanding that the gap insurance you find with a lease is going to pay the difference between the insurance value and the balance on the lease payoff to make the bank whole.

However, it does not cover what you may have already paid in cap cost reduction, which can be pretty hefty on a Ferrrari lease. I have been advised against one-payment leases on that basis and have always put as little as possible down on a lease.

I'd say you'd want to look closely at the fine print to see if that's actually the case.

 

My insurance allows me to simply put a value to the car...

 

What insurance is that?

 

Pure but other luxury providers do the same, Chubb...