Except GAP pays the owner’s debt on the quick depreciation. The vehicle drops in value faster than the debt is being paid. Lose and win for the owner.
PMI insures the banks interest and the owner pays the cost. Win win for the bank.
The real answer is don’t not go in debt on toys and depreciating vehicles.
Gap and PMI both insure the owners debt to the lender. They both protect the lender from the debt being greater than the value of the asset (bike or house). And both get implemented when LTV gets too high (for a bike itís the combination of too low a down payment and fast depreciation, for a house itís too low a down payment, a long term so that principal doesnít drop meaningfully for years and generally fairly modest appreciation).
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Everything we own is with Allstate. Had to keep it all together to get coverage on our rental houses. When I was shopping around, it seemed as if most try to make it unaffordable if you only want part of your things insured with them, or like Allstate said, had to have all our stuff with them before they would write rental policies. They were cheaper than anybody else I shopped, except for our home. They were at $1260/yr on our house, and Alfa was around $1000 even. Which was great....until Alfa quoted our rental houses at god awful high rates, like nearly double what Allstate charged and it was for less coverage than we got with Allstate. Auto costed nearly double with Alfa what it was with Allstate too. Alfa's 6 month rates were comparable to Allstate's annual rates. So I ate the higher homeowner's policy with Allstate and moved all our stuff there, because overall everything else was cheaper.
For example though, previous homeowner's policy with Cincinnati through a local independent agent was only $802/yr. Our other policies with them were equally cheap and that was for good coverage too. I carried those policy packets from Cincinnati around to all the local agents after Cincinnati stopped selling residential policies through that independent agent, and nobody could touch those numbers. Went to Farmers, dropped off the packets and said I want comparable coverage and rates to this, she said she would work on it and call me back. Later that evening she called and said she couldn't even get close to it, that I could come get my old policy packets back whenever.....did not even try to quote me any numbers Lol. I absolutely hate shopping for insurance.
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Last edited by TacomaJD; 6th June 2019 at 19:51.