Go to navigation Go to content
Toll-Free: 800.310.5520
Phone: 718.701.2776
The Law Offices of Frank J. Dito, Jr.

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?


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.
Car accident, personal injury and workers’ compensation attorney serving Staten Island and Brooklyn New York.