I am refinancing my loan. Can I purchase GAP at that time?
Yes, the GAP would cover the new loan term and balance.
I have GAP and am going to refinance my loan - Does the GAP transfer to the new loan?
GAP could transfer to the refinanced loan. However, if any money is added to the loan or the
term extended when the loan is refinanced, GAP will not cover these changes. The GAP you
purchased is an Addendum to the loan contract on which it was sold. Any changes to the original
loan terms can affect the GAP coverage.
I am refinancing my loan at another financial institution – can the GAP transfer to my new loan?
No, the GAP is nontransferable.
Can GAP be transferred to a different vehicle?
No, it cannot be transferred to a different vehicle.
I am going to have additional funds added to my loan – do I need to purchase a new GAP
enrollment?
Yes. Any additions or modifications to your loan will not be covered unless you purchase a new
GAP enrollment. The GAP you originally purchased is an addendum to the loan on which it was
sold so any monies added to the loan would not be covered.
My car has been totaled. Should I continue to make payments on my loan?
Yes, continue to make your loan payments and notify your insurance representative of the loss
immediately .
Auto Gap insurance refund/canceling Gap insurance/pro-rated refund of Gap insurance.
If you purchased gap insurance from a car dealership or finance company you may not be able to
cancel the contract or receive a refund. It is always in your best interest to take the time to read
the contract and see what provisions are included for cancellation and subsequent refund.
However, gap insurance purchased from a major insurance provider as an addition to
comprehensive coverage can be cancelled at any time.
How do I know when I don't need GAP insurance anymore?
When the payoff amount of your loan approximates the book value of your vehicle. The payoff
value of your loan should be available on your bank's website. You can check the value of your
vehicle at kbb.com.
Does GAP insurance have a deductible?
No.
How is my deductible covered by GAP?
The primary insurance deductible is covered as part of your unpaid loan balance; it is not
“reimbursed”. GAP covers the difference between the actual cash value (ACV) of your vehicle and
the outstanding loan balance. Since your insurance company pays ACV less the amount of your
deductible, the “gap” is increased by this amount. When your loan balance is paid off by GAP the
deductible is paid as part of that balance.
If my primary insurance pays off my loan balance in full does GAP reimburse me for my
deductible?
No, see “How is my deductible covered” question above. You did not actually pay for the
deductible, so GAP does not pay the deductible back to you.
Can I purchase my salvage (totaled vehicle) back from my insurance company?
If you purchase your salvage from your insurance company, they will deduct this amount from
what they pay.
The amount of this deduction will not be covered by GAP.
Can I buy GAP on a salvage/reconstructed titled vehicle?
No. Salvage or reconstructed title vehicles are not eligible for GAP.
Does GAP cover towing and storage expenses?
No, it does not cover towing and storage expenses.
If I am past due on my loan, how does this affect the GAP settlement?
GAP will cover past due payments up to 30 days, if you are past due more than that, the past due
payments will be deducted from the GAP settlement. This includes skipped payments as part of a
lender skip a pay program. GAP does not cover any late charges.
Is there a deadline to file a GAP claim?
GAP claims must be filed within 60 days from the date of your primary carrier’s settlement.
How do I receive payment for the GAP claim?
The GAP claim settlement is paid to the bank, finance company, or credit union that financed the
purchase of your vehicle and applied to your loan.
I have a service warranty policy on my vehicle – does this affect the GAP claim?
GAP does not cover the refundable portion of any service warranty or full term credit life
insurance since you can obtain this reimbursement back by canceling the policies with the
appropriate companies.
Yes, the GAP would cover the new loan term and balance.
I have GAP and am going to refinance my loan - Does the GAP transfer to the new loan?
GAP could transfer to the refinanced loan. However, if any money is added to the loan or the
term extended when the loan is refinanced, GAP will not cover these changes. The GAP you
purchased is an Addendum to the loan contract on which it was sold. Any changes to the original
loan terms can affect the GAP coverage.
I am refinancing my loan at another financial institution – can the GAP transfer to my new loan?
No, the GAP is nontransferable.
Can GAP be transferred to a different vehicle?
No, it cannot be transferred to a different vehicle.
I am going to have additional funds added to my loan – do I need to purchase a new GAP
enrollment?
Yes. Any additions or modifications to your loan will not be covered unless you purchase a new
GAP enrollment. The GAP you originally purchased is an addendum to the loan on which it was
sold so any monies added to the loan would not be covered.
My car has been totaled. Should I continue to make payments on my loan?
Yes, continue to make your loan payments and notify your insurance representative of the loss
immediately .
Auto Gap insurance refund/canceling Gap insurance/pro-rated refund of Gap insurance.
If you purchased gap insurance from a car dealership or finance company you may not be able to
cancel the contract or receive a refund. It is always in your best interest to take the time to read
the contract and see what provisions are included for cancellation and subsequent refund.
However, gap insurance purchased from a major insurance provider as an addition to
comprehensive coverage can be cancelled at any time.
How do I know when I don't need GAP insurance anymore?
When the payoff amount of your loan approximates the book value of your vehicle. The payoff
value of your loan should be available on your bank's website. You can check the value of your
vehicle at kbb.com.
Does GAP insurance have a deductible?
No.
How is my deductible covered by GAP?
The primary insurance deductible is covered as part of your unpaid loan balance; it is not
“reimbursed”. GAP covers the difference between the actual cash value (ACV) of your vehicle and
the outstanding loan balance. Since your insurance company pays ACV less the amount of your
deductible, the “gap” is increased by this amount. When your loan balance is paid off by GAP the
deductible is paid as part of that balance.
If my primary insurance pays off my loan balance in full does GAP reimburse me for my
deductible?
No, see “How is my deductible covered” question above. You did not actually pay for the
deductible, so GAP does not pay the deductible back to you.
Can I purchase my salvage (totaled vehicle) back from my insurance company?
If you purchase your salvage from your insurance company, they will deduct this amount from
what they pay.
The amount of this deduction will not be covered by GAP.
Can I buy GAP on a salvage/reconstructed titled vehicle?
No. Salvage or reconstructed title vehicles are not eligible for GAP.
Does GAP cover towing and storage expenses?
No, it does not cover towing and storage expenses.
If I am past due on my loan, how does this affect the GAP settlement?
GAP will cover past due payments up to 30 days, if you are past due more than that, the past due
payments will be deducted from the GAP settlement. This includes skipped payments as part of a
lender skip a pay program. GAP does not cover any late charges.
Is there a deadline to file a GAP claim?
GAP claims must be filed within 60 days from the date of your primary carrier’s settlement.
How do I receive payment for the GAP claim?
The GAP claim settlement is paid to the bank, finance company, or credit union that financed the
purchase of your vehicle and applied to your loan.
I have a service warranty policy on my vehicle – does this affect the GAP claim?
GAP does not cover the refundable portion of any service warranty or full term credit life
insurance since you can obtain this reimbursement back by canceling the policies with the
appropriate companies.
Automobile Gap Insurance FAQ's
The following Gap insurance FAQ's should be used as a general guide to help you make an
informed decision when purchasing Gap auto insurance coverage.
Although every effort has been made to ensure the accuracy of this FAQ, differences in coverage
options and State laws governing individual insurers make it impossible to provide the most
accurate information for every situation.
Who Sells Gap Insurance?
Gap insurance is usually available as an add on from the dealership where you purchased your new
or used car. This is always the most expensive option. Please see the Buyers Guide on this site
for more information on the least expensive options.
Gap insurance is also available from many, but not all, auto insurance companies - check with your
insurance agent or contact your insurance company directly.
Some insurance companies do not offer gap coverage but might instead offer Loan/Lease Payoff
coverage or New Car Replacement coverage to customers for an additional fee.
Can I buy this same type of coverage through my dealer?
Yes you can. But you will find GAP rates sold through dealerships are generally much higher than
auto gap insurance online
How do I pay for the GAP coverage?
Normally, GAP is financed in with your loan when purchased through a car dealership. A better
option if gap insurance is available from your current insurance company is to purchase gap
insurance as an add-on to your current policy. The cost is usually only $20 - $30 per year and can
be added to your regular vehicle insurance payment.
Does GAP replace my comprehensive and collision coverage?
No, GAP is not a substitute for collision or property damage insurance. As a matter of fact you
must have comprehensive coverage on your vehicle as condition for obtaining gap insurance.
The following Gap insurance FAQ's should be used as a general guide to help you make an
informed decision when purchasing Gap auto insurance coverage.
Although every effort has been made to ensure the accuracy of this FAQ, differences in coverage
options and State laws governing individual insurers make it impossible to provide the most
accurate information for every situation.
Who Sells Gap Insurance?
Gap insurance is usually available as an add on from the dealership where you purchased your new
or used car. This is always the most expensive option. Please see the Buyers Guide on this site
for more information on the least expensive options.
Gap insurance is also available from many, but not all, auto insurance companies - check with your
insurance agent or contact your insurance company directly.
Some insurance companies do not offer gap coverage but might instead offer Loan/Lease Payoff
coverage or New Car Replacement coverage to customers for an additional fee.
Can I buy this same type of coverage through my dealer?
Yes you can. But you will find GAP rates sold through dealerships are generally much higher than
auto gap insurance online
How do I pay for the GAP coverage?
Normally, GAP is financed in with your loan when purchased through a car dealership. A better
option if gap insurance is available from your current insurance company is to purchase gap
insurance as an add-on to your current policy. The cost is usually only $20 - $30 per year and can
be added to your regular vehicle insurance payment.
Does GAP replace my comprehensive and collision coverage?
No, GAP is not a substitute for collision or property damage insurance. As a matter of fact you
must have comprehensive coverage on your vehicle as condition for obtaining gap insurance.
Gap Auto Insurance Coverage FAQ's
| GAP Auto Insurance Coverage |
What Are The Underwriting Rules For GAP Insurance?
Generally, the following rules apply:
Maximum APR of the auto loan
12.5% However, this doesn't necessarily mean you can't get GAP insurance. What this usually
means is the insurance company will pay out based on a maximum 12.5% APR. If your auto loan
was written at 21% for example, you would still be responsible for the difference in interest. As
always, check with the issuer to determine the exact terms.
Maximum term
84 months for auto loans; 60 months for auto leases/balloon loans. This should not be an issue in
most cases, since most loans do not go beyond the 60 month range.
How long do I have to get GAP Insurance?
Loan/Lease can be enrolled in coverage if financed with within the last 12 months.
Gap coverage limited to
120% of MSRP (new vehicles) or NADA retail (used vehicles) plus 30% for dealer Adds (like service
contracts, credit life, etc.)
NOTE: A consumer who is financed above these levels certainly needs gap coverage; however in
case of a claim, it’s likely the consumer will have some leftover gap deficiency to pay off.
Vehicle age limitation
Current model year minus 8 years (2010 model year: vehicle must be 2002/newer).
Vehicles
Private passenger autos, trucks, vans, RV's, and motorcycles. No heavy commercial-use vehicles;
no livery or delivery type vehicles are eligible.
Maximum loan amount financed
$100,000. Vehicles Financed with Open-End Line of Credit or Revolving Credit are Not Eligible. No
single payment of irregularly amortizing loan contracts.
Is Gap available in every state?
Gap insurance is not available in all states. The following states: CT, LA, VA, WA have not allowed
the sale of gap insurance in the past. Check with your insurance company or your state's office of
insurance for the current status.
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Generally, the following rules apply:
Maximum APR of the auto loan
12.5% However, this doesn't necessarily mean you can't get GAP insurance. What this usually
means is the insurance company will pay out based on a maximum 12.5% APR. If your auto loan
was written at 21% for example, you would still be responsible for the difference in interest. As
always, check with the issuer to determine the exact terms.
Maximum term
84 months for auto loans; 60 months for auto leases/balloon loans. This should not be an issue in
most cases, since most loans do not go beyond the 60 month range.
How long do I have to get GAP Insurance?
Loan/Lease can be enrolled in coverage if financed with within the last 12 months.
Gap coverage limited to
120% of MSRP (new vehicles) or NADA retail (used vehicles) plus 30% for dealer Adds (like service
contracts, credit life, etc.)
NOTE: A consumer who is financed above these levels certainly needs gap coverage; however in
case of a claim, it’s likely the consumer will have some leftover gap deficiency to pay off.
Vehicle age limitation
Current model year minus 8 years (2010 model year: vehicle must be 2002/newer).
Vehicles
Private passenger autos, trucks, vans, RV's, and motorcycles. No heavy commercial-use vehicles;
no livery or delivery type vehicles are eligible.
Maximum loan amount financed
$100,000. Vehicles Financed with Open-End Line of Credit or Revolving Credit are Not Eligible. No
single payment of irregularly amortizing loan contracts.
Is Gap available in every state?
Gap insurance is not available in all states. The following states: CT, LA, VA, WA have not allowed
the sale of gap insurance in the past. Check with your insurance company or your state's office of
insurance for the current status.
Top