Page 3 - MidWeek - Jan 4, 2023

January 4, 2023 MIDWEEK 3
PAULETTE ITO
SVP Marketing
Hawaiian Financial Federal Credit Union
Gap Insurance Paulette Ito
many are still completely unaware of its existence and the benef its of having it.
No one purchases a car thinking they will get into an accident or total their vehicle. Lenders normally require comprehensive coverage for collateral damage in the case of an accident, and Hawaii state law requires liability and personal injury. However, if there is a total loss to a vehicle, the borrower is
responsible for the gap balance insurance does not cover.
When was the last time you looked at your insurance policies? Are you planning to purchase a new car? Are you aware of supplemental insurance products like gap insurance that could put your mind at ease?
We want you to live your best life by being well, being safe and being prepared. That’s why Hawaiian Financial
Federal Credit Union created the “Get Your House In Order” initiative. It is a way of life. It is the peace of mind knowing you are prepared for the three or four steps ahead of where you want to go.
Get your house in order by downloading the Ho‘okele personal planning booklet. It contains legacy wishes, employment and retirement information, insurance and
bank document locations, and vital contacts. Over the next year, there will be four releases of the “Get Your House in Order” campaign with a new section of the Ho‘okele guidebook available from the HIFICU.com website during each quarterly phase.
For more information about Get Your House in Order, email: GYHO@hificu.com.
Scan to download
In 1987 on an ordinary day in Hilo, I was using my parents brand-new Oldsmobile to run errands and waste the 30-plus minutes I had before picking my mom up from work. I stopped to grab some groceries, and while returning to the car, I was confused and then shocked to see it was not there.
At first, I was doubting myself and where I thought I had parked, but as the doubt faded, my feeling turned to panic. The abbreviated version of the story is that my parents’ new car was stolen by wayward juveniles who were wards of the state of Hawaii. They took it for a joyride, got stuck in a canef ield and decided to torch the vehicle. Yup!
Nothing happened to those juveniles and the insurance did not cover 100% of the cost of the car. My parents were not happy, to say the least. Even worse, they had to continue paying the loan on the burnt-
to-a-crisp Oldsmobile and take out a new loan for another useable vehicle.
Once you drive that shiny new car off the dealer lot, the value of your car drops, some makes and models more significantly than others. According to Nerdwallet.com, the average car loses 10% of its value when driven off the lot and 20%-30% in the f irst year. That’s what is known as the gap, or difference between what your car is worth and the amount you owe.
In the early 1980s, insurance companies started offering gap insurance to supplement coverage for those who found themselves owing more that the car was worth in a total loss situation. My parents would have benef ited from this type of insurance, but it was new at the time and they didn’t know about it. And, even though this type of insurance has been around for almost two decades,