We (indirectly) help GAP providers.
Borrowers often purchase GAP (Guaranteed Asset Protection) products to protect themselves in the event their vehicle is totaled in an accident and they owe their lender more than the value of the vehicle on the date of loss. In such an event, after their primary insurance pays the Actual Cash Value of the vehicle, the GAP Provider is liable to pay the remaining due on the loan above the Actual Cash Value (except for shortfalls from missed payments, of course). However, in cases where the Market Value Settlement from the primary carrier falls short of the Actual Cash Value, GAP Providers often get stuck holding the bag to make the borrower whole even though some or all of the shortfall is the rightful liability of the primary carrier. In fact, when questioned about Market Value Settlements that seem low, insurers typically will ask their client if they have GAP coverage, and if told “yes,” they will respond, “Well why does it matter when GAP will cover any remaining amount due? Isn’t that why you purchased GAP?”
This deceitful practice not only harms the insured who may be due even more than the payoff on the vehicle, but it routinely shifts liability from the primary carrier to GAP Providers, with little to no recourse. GAP Providers, who owe shortfalls relative to the Actual Cash Value, typically include contractual reductions in their liability for any deductions made by the primary carrier in their Market Valuation Report, such as for high mileage, condition adjustments, prior damage, etc. This only partially insulates the GAP Provider from under-valuations by insurance carriers while placing themselves in a very contentious, no win position. These deductions often lead to borrowers who purchased GAP protection still having a balance due their lender after all settlements are paid. For any GAP Provider, explaining pass-through deductions to an irate caller is not a pleasant task, and the inevitable negative ratings hurt business.
Of course, as a Public Insurance Adjuster Agency, we work only for the insured, never directly for a GAP Provider. However, by establishing the true Actual Cash Value for a vehicle, we set in concrete the fencepost by which all liabilities are measured. Once the Actual Cash Value is determined, the primary carrier owes that amount, the GAP Provider owes the remaining loan payoff above that amount, and the borrower owes nothing, as the entire process was designed. That is why we call these “Liability Realignment Claims.” Of course, in cases where the Market Valuation Report overvalues a vehicle due to incorrect inputs into the valuation algorithm, liability realignment would add liability to the GAP Provider and reduce it for the primary carrier. However, in our experience such cases are rare, and no one should ever complain about paying their fair, contractual obligation.
All we need in order to fairly align total loss liabilities is for the GAP Provider to send us the Market Valuation Report for all submitted claims. We can determine which valuations are significantly flawed so the GAP Provider can pass along the information to their client and recommend they call Auto Claim Specialists. We can take it from there. It is that simple.