LossPay is Simplifying Complete Insurance Protection with Diminished Value Coverage

Navigating the nuts and bolts of auto insurance can be an incredibly daunting task. But, understanding the integral parts played by Diminished Value (DV) coverage can arm you with the tools to maintain your vehicle’s value, even as market trends shift.

What is Diminished Value Insurance?

Let’s lift the veil on diminished value. Imagine your pristine $60,000 car suffers an accident. It’s restored to its former glory, but it’s now worth a less impressive $45,000 due to its accident history. The $15,000 dip is the “Diminished Value”.

This happens because a history of accident damage can deter potential buyers, leading to a lower market price. Sadly, standard car insurance often leaves you in the cold, not covering DV and leaving you to shoulder the financial blow. Here’s where Diminished value insurance swoops in, filling this void by covering the difference between your car’s pre and post-accident market values.

The Difference Between DV Coverage and GAP Coverage

While DV coverage protects against the loss in value post-accident, GAP coverage is distinct yet equally important.

GAP coverage protects you if your car is totaled or stolen and you owe more on your loan or lease than the car’s depreciated value. Essentially, it covers the “gap” between the amount you owe and the vehicle’s actual cash value.

The Need for Diminished Value Insurance

Accidents are, regrettably, relatively commonplace. With an alarming six million reported annually in the U.S., the odds of encountering one during your driving life are pretty high. After such an event, vehicles typically see their resale value shrink by an average of 20%, based on the severity of the damage. This translates into a substantial financial blow unless armed with diminished value insurance.

The Bottom Line

In a world where accident statistics remain stubbornly high, adding diminished value coverage to your insurance policy isn’t just an option; it’s necessary, particularly if you want to avoid substantial financial implications.

While DV and GAP coverage plays distinct roles, they complement each other perfectly, providing comprehensive protection for your vehicle’s value. As America’s first provider of diminished value insurance policies for cars valued at $50K and higher, here at LossPay, we simplify the claims process, giving you peace of mind in otherwise stressful circumstances.