GAP & SECONDARY INSURER RECOVERY

When a vehicle is totaled, primary auto insurers are required to pay the full actual cash value (“ACV”) of the destroyed vehicle; however, primary auto insurers often fail to do so. For example, the primary insurer might calculate ACV using a method contrary to law. The primary insurer may use comparable vehicles that are the wrong year, make, model, or trim.  The primary insurer’s evaluation might miss valuable features and options that were on the destroyed vehicle.

For all of these reasons and more, the primary insurer’s payment may have been for significantly less than the ACV of the destroyed vehicle. For every $1 underpaid by a primary insurer, the amount paid by a GAP or other secondary insurer is increased by $1. Primary auto insurers shift some of their burden onto GAP or other secondary insurers; Goldfein & Associates shifts it back.