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Auto Liability Myth #3 – “If my vehicle is totaled, the insurance company will pay the remaining cost of my loan agreement”

If your vehicle is totaled, you may believe that the insurance company will pay the remaining cost of your loan or lease agreement. Unlike home insurance policies, personal auto policies pay claims on an actual cash value basis, not replacement costs. That means that payment from the insurance company will be reduced by the depreciation of your vehicle.

At the time of a claim, this depreciated value may still be less than the remaining balance due on your loan or lease. This creates a gap in coverage that you may be held responsible for to pay out of pocket.

However, there are enhancements available to provide this valuable gap coverage. That’s why at Rue Insurance, our licensed agents are available to speak with you one-on-one, to develop a customized insurance plan that fits your unique needs. Contact us today and learn more about how to Be Ready with Rue at 609-586-7474 or on our website here: https://www.rueinsurance.com/contact/.

Robert Plasencia

About Robert Plasencia

Robert joined Rue Insurance in 2020 as a Personal Risk Advisor with over 10 years of experience in the insurance industry. Robert specializes in delivering innovative solutions and advising our personal lines clients to reduce the total cost of risk at the right budget.​ About Robert | More Posts by Robert