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I was in an accident just a few days after I picked up my new car. My insurance company is offering me less money (actual cash value of the car) than I owe to the bank. Am I responsible for the difference?

A: The difference between the amount that your insurer pays you and the amount that is owed to the bank on your loan is known as GAP. In New York, the law does not require that gap insurance or a gap waiver be offered to you.

In many new car leases in New York, such as those from Honda, Ford, Hyundai and GM, gap coverage is automatically included in your lease. For leases outside of New York, gap coverage may not be included.

If you financed your vehicle through the car company or a bank, gap coverage may not be automatically included. Instead, the car dealer must notify you, by a separate document, that you would be liable for the gap.

Make sure that your lease or financing agreement includes gap insurance or a waiver. That is the time when you need to buy coverage, if it's not already included. If you did not have gap coverage and were in an accident, the only way that you would be able to make up the gap would be to start a lawsuit against the other person's insurance company.

                                                                                                       
Frank J. Dito, Jr., Esq. a member of the "Multi-Million Dollar Advocates Forum", is an experienced trial attorney who represents injured individuals and their families. Frank is the author of "A Lawyers Guide to Car Insurance" , the publisher of the "New York Injury Law Blog" and he is a frequent speaker regarding the recovery of benefits and the preservation of rights resulting from accidents and work place injuries. If you or a family member has been injured in an accident or in the work place contact Frank J. Dito, Jr. to discuss your legal rights and how he assists clients in obtaining the benefits and compensation that they are entitled to.