If you have recently paid off your vehicle loan, you may be wondering if you are now entitled to a GAP insurance refund.
What Is GAP?
In short, GAP insurance (Guaranteed Auto/Asset Protection) is an optional type of auto insurance. Some lenders insist on it if you take out an auto loan. If your car is totaled (written off by insurance) or stolen, GAP insurance pays any additional money you owe on the car that exceeds the payout you received from your comprehensive or collision cover.
Pros And Cons Of GAP
GAP insurance is a great way to supplement your collision insurance for the period of time that you owe more for the vehicle than what its actual cash value is – which is what your collision insurance policy pays out if the car is totaled.
This is most commonly the case in the first few years of paying off the vehicle, especially if you put down less than 20% deposit and took a loan repayment term of five years or more. The Kelley Blue Book will tell you whether you need GAP insurance by showing whether your car is currently worth less than the balance on the loan? If so, you need GAP insurance.
Auto dealers try to sell you GAP insurance for a flat fee as an add on to your financing, but it isn’t always necessary. There’s no need for it if you paid cash for your new car, or if you put down a sizeable deposit/down payment. GAP insurance will only be useful for the first few years after purchasing your new vehicle. Later, there won’t be a gap between the vehicle’s value and what you still owe.
Steps To Getting Money Back From Your GAP Insurance Policy
It is possible to get a prorated refund on your GAP coverage if you have paid your loan off early. The GAP insurer should refund the unused premiums that you have already paid for.
To see if you’re eligible for a refund, check the terms and conditions of your policy as these vary across GAP insurance providers. If you realize that your GAP insurance policy is worthless and that you won’t be able to collect any coverage even in the event of a total loss, you should:
- Contact your insurance company
- Ask for the steps to cancel the GAP cover and get a refund
- Fill out paperwork
- Wait for payment
- Or contact Shamis & Gentile, PA about GAP insurance refund class action lawsuit investigation. We are dedicated to assisting clients who deserve better treatment from insurers.