Sec. 42-417. Liability for gap amount on total loss of goods.
Sec. 42-417. Liability for gap amount on total loss of goods. (a) In this section,
"gap amount" means the amount that would be owed by the lessee if a total loss of the
goods occasioned by theft, physical damage or other occurrence were considered an
early termination of the lease, less the portion of the cash value of the goods received
by the holder from the lessee's insurer or from any other source. The term does not
include the deductible amount applicable to a casualty insurance policy on the goods,
past due lease payments, or any other unpaid amounts owed by the lessee under the
lease at the time of the total loss of the goods, or amounts by which the insurance proceeds
otherwise payable are reduced on account of past due premiums or the condition of the
goods before the total loss occurred.
(b) Except as otherwise provided in subsection (c) of this section, a consumer lease
may not provide that the lessee is responsible for the gap amount. A provision in violation
of this subsection is not enforceable.
(c) If a consumer lease so provides, the holder may recover from the lessee the
portion of the gap amount attributable to:
(1) The lessee's failure to maintain in effect casualty insurance required under
the lease;
(2) The lessee's fraud, intentional wrongful act or omission, or gross negligence; or
(3) The forfeiture or confiscation of the goods under governmental authority.
(P.A. 02-81, S. 28.)
History: P.A. 02-81 effective July 1, 2003.