Does gap insurance cover unemployment benefits in New York?
I'm really confused about something - I have gap insurance on my car loan and I just lost my job last week. A friend told me that some gap insurance policies might cover payments if you become unemployed, but I can't find anything clear in my policy documents. Has anyone dealt with this before? I'm filing for NYS Department of Labor unemployment benefits but wondering if my gap insurance could help with my car payments while I'm waiting for my claim to process. I'm worried about falling behind on payments since adjudication can take weeks.
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StarSailor
Gap insurance typically only covers the difference between what you owe and the car's value if it's totaled or stolen. What you're thinking of might be payment protection insurance or unemployment insurance that some lenders offer. Check if you have any add-on coverage for unemployment - it would be listed separately from gap insurance on your loan documents.
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Sofia Morales
•Oh that makes sense! I'll dig through my paperwork again. Do you know if there's a waiting period for that kind of coverage if I do have it?
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Dmitry Ivanov
yeah gap insurance is just for if your car gets wrecked, not for unemployment. but definitely file for UI asap if you haven't already - the sooner you get your NYS Department of Labor claim in the better
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Ava Garcia
I had a similar situation last year. Gap insurance won't help with unemployment, but I did have payment protection on my auto loan that I completely forgot about. It covered 6 months of payments when I was laid off. Also, while you're waiting for your unemployment claim to process, you might want to call your lender and explain the situation - many will work with you on temporary payment deferrals.
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Sofia Morales
•That's really helpful! I'll call my lender tomorrow. How long did your NYS Department of Labor claim take to get approved?
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Ava Garcia
•Mine took about 3 weeks because it went into adjudication. If you're having trouble getting through to NYS Department of Labor to check your status, I actually used a service called Claimyr (claimyr.com) that helped me get connected to an agent. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Really saved me a lot of frustration with busy phone lines.
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Miguel Silva
Wait I'm confused about this too. I thought gap insurance was supposed to protect you from financial gaps? Why wouldn't unemployment count as a gap in income?? This whole insurance system is so confusing.
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StarSailor
•I understand the confusion with the name! Gap insurance specifically refers to the 'gap' between your loan balance and your car's actual cash value if it's totaled. It's not about income gaps. For unemployment protection, you'd need employment insurance or payment protection insurance.
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Zainab Ismail
Been there, done that. Gap insurance = car gets destroyed, insurance pays difference. What you want is income protection or unemployment coverage which is totally separate. Focus on getting your weekly claims filed with NYS Department of Labor and see if your lender has any hardship programs while you wait for benefits to kick in.
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Ava Williams
Just wanted to add another perspective - while gap insurance won't help with unemployment, if you're struggling with car payments, don't forget to check if your state has any emergency assistance programs. New York has some temporary financial aid programs that might help bridge the gap while your NYS Department of Labor claim is processing. Also, document everything related to your job loss (termination letter, final pay stub, etc.) because you'll need it for your unemployment application. The more organized your paperwork is, the smoother the process usually goes.
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