Who is responsible for paying my loan when waiting on a gap insurance claim?

I got into an accident six months ago that totaled my car. My insurer paid out their part of the claim. Apparently, the gap insurance company needed additional documents and I still have an overdue balance of $1,200 on my loan. My credit has started to fall because of this. What should I do?

Answer
“Although you can no longer drive your vehicle, you are responsible for the loan balance. As it is currently overdue, it will continue to impact your credit until you start paying the balance again.
While this is an extremely unfortunate situation, the best thing you can do is to resume payments.
Depending on how long it’s been since your last payment, your lender may have sent your account to collections. If that’s the case, be sure to contact the collections company.
You can let them know about your situation and also set up a payment plan. You should also reach out to your lender.
Even though you will be resuming payments, your gap insurance should still pay the $1,200 that was left when the car was totaled. Any payments that you make now may be reimbursed or refunded once the claim has been approved. “
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Emily Maracle
Answered on May 03, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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