Legal Question in Insurance Law in Georgia

My husband and I were rear ended by an uninsured motorist on the interstate. We had full coverage including gap insurance. The vehicle was totaled and forms submitted for the Gap insurance to finish the claim. The company that financed the vehicle calls us daily asking for payment, says it is our responsibility to continue to pay for the vehicle and today tells me that the Gap Insurance company is no longer in business. My car insurance paid their portion and balance owed is close to 4k. The finance company is entitled to their money, I understand this. If the Gap Insurer does go out of business, does this make it my responsibility to pay? ( By the way, the Finance company told me early on that I should pay monthly pmts and that the Gap insurance would reimburse me. ) The car dealership where the vehicle was purchased set up the financing and tells me that I need to continue to pay the monthly payment or my credit will be affected.

So what are my rights in all this? If I pursue what the finance company says about the insurer going out of business, and it is correct, what is my obligation? Is the company that originally held the policy liable in any way to honor the agreement? Does the car dealership have any responsibility since they sold the policy and set up the finance agreement?


Asked on 9/16/11, 2:00 pm

1 Answer from Attorneys
Glen Ashman Ashman Law Office also dba Glen Ashman Attorney

First of all as you found out, one NEVER should buy gap insurance at a dealer. Buy it from your own insurer.

But since you did, start by contacting the state insurance commissioner to verify what happened.

Usually if an insurer went out of business, you simply lose out.

However, there is POSSIBLY an argument that the dealer, who made a huge commission on selling you garbage, and the finance company, who also got a cut, could be sued, so see a lawyer who specializes in insurance fraud to see if you have a case.

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Answered on 9/16/11, 3:16 pm


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