Los Angeles, CA, USA — Yusuke Takeda is a 14-year P&C insurance professional with one of the largest auto insurers in Tokyo, Japan. He co-founded LossPay, Inc., in 2018.
Imagine fulfilling a childhood dream of purchasing an exotic car, in this case a $330,000 Lamborghini Huracan Avio (limited edition 1 of 250), and within 24 hours being rear-ended by a taxi and instantly losing $80,000 in resale value, even though it had full coverage insurance. Unfortunately, this scenario is not uncommon. The biggest distinction is this accident happened to a high priced supercar not an average priced economy vehicle.
People often mistakenly use the term full coverage to refer to an auto insurance policy that can indemnify them against all losses when involved in an accident, whether they’re at fault or not. But the situation described above is one of the prime scenarios where that expectation falls short of reality – and the losses get even more substantial the higher the vehicle’s value.
And here’s the reason why: Even though the physical damage to the vehicle is repairable, the car now has an accident history. When offered for resale, the next potential buyer will inherently demand a reduction in price, often expressed between 10 – 30% of the vehicle’s value. That price reduction is called diminished value.
While full coverage insurance will pay for repairs, it won’t account for the decrease in the car’s value due to its accident history. Put simply: the term full coverage can be incredibly misleading, which is what inspired the creation of LossPay, Inc., the world’s first insurance provider specializing in diminished value.
“Until now, we can find no auto insurance provider that offers its policyholders a comprehensive diminished value coverage option, even though most accidents result in a diminished value event”, says Yusuke Takeda, one of the co-founders of LossPay, Inc. “In 2018, this was true for 78% of all accidents in the United States, with over 5.6 million of the total reported 7.2 million accidents not resulting in a total loss. Leaving millions of policyholders only one recourse for relief which was to file a lawsuit – which is expensive, time-consuming, and offers no guaranteed outcomes.”
Why is there such a common misconception that auto insurance provides universal coverage for 100% of losses, but the threat of diminished value mysteriously is not factored into that equation? Well, first of all, auto insurance policies usually include coverage for a wide variety of potential losses, including liability, physical damages to vehicles, theft, and medical payments resulting from a car accident. People can also purchase add-on coverage options such as GAP (General Asset Protection) insurance (which covers the remaining loan balance when the vehicle is considered a total loss), roadside assistance, and rental car reimbursement while their car is in the body shop.
That’s a lot of great coverage options, but there’s no mention of how their insurer will compensate them for the costly accident that now represents a permanent blemish on the vehicle’s CARFAX® report. Most people actually have the misconception that diminished value is covered under GAP insurance. But the primary trigger for GAP insurance is the accident has to result in a total loss.
The other reason for the lack of awareness of the diminished value predicament is that the loss in resale value for a Toyota Prius or any other average-priced vehicle is potentially non-existent, while higher-valued luxury and exotic cars will suffer a more substantial financial loss.
That is why LossPay provides diminished value coverage specifically for owners of vehicles with a residual value of $50,000 and higher. Average priced vehicles get along just fine with traditional auto insurance coverage. But high-end luxury and exotic vehicles demand a more sophisticated and robust level of coverage, which will afford policyholders a piece of mind alternative in case of a diminished value event.
Contact an auto insurance professional or wealth advisor today to learn more about protecting high-end luxury and exotic cars with LossPay diminished value coverage or take immediate action by visiting us at LossPay.com.
Media Contact
Company Name: LossPay, Inc.
Contact Person: Sarah Gansen
Email: sarah.gansen@losspay.com
Website: www.losspay.com
