The excitement that accompanies getting a new ride should not be cut short by unforeseen circumstances. A practical way to ensure this entails getting car insurance.
In addition to your car insurance, getting Gap Insurance is more beneficial. Especially, when you have to pay for your car over a period of time.
If you do not understand the term Gap insurance, this article on “gap insurance refund definition” explains it in detail. In addition, it answers a regular question on if you can get Gap insurance for a car that is paid off.
The table of contents below highlights all the sub topics duly discussed in this article.
What is GAP Insurance?
This insurance package covers the total loss to a vehicle to any catastrophic event. Basically, GAP insurance covers normal comprehensive and collision insurance in other insurance offers.
In the case of fire, theft, vandalism, flood, accident, tornadoes, or hurricanes – GAP insurance covers the loss.
GAP type of insurance covers the difference between the amount you owe on your vehicle and the total worth of your vehicle. It provides paramount protection to your finance and heavily impacts your life.
Mostly, when a sad event damages your car to the point that it costs more to repair than it cost to buy a new one, GAP insurance coverage saves the day.
It is a clear fact that the value of your car goes down once you purchase it. And, you may not have paid off a large percent of your car loan in six months.
If an unexpected event happens within this period, GAP insurance pays out the additional cost after your normal car insurance pays out your car’s worth.
What is GAP Insurance Refund Definition?
GAP Insurance Refund Definition states that an unearned premium is refunded to the insured.
Insurance is quite important for vehicles because most vehicles’ value begins to depreciate as soon as the vehicle is purchased. Basically, a gap insurance policy covers the difference between what your car is worth after depreciation and what you owe on the vehicle.
If you get a car and luckily you are able to pay off your loan early, you can get a partial refund on GAP coverage.
For instance, a GAP insurance refund will give back two year’s worth of premium charges to the insured for a vehicle that is financed for 48 months but paid off in 24 months.
This means you are entitled to a Partial GAP Insurance Refund for GAP coverage you do not use if you pay off your vehicle early.
Now, you are probably wondering why you need GAP insurance since you would soon pay off what you owe.
Now, gap insurance refund definition is clear, read through to ascertain why you need one.
How Does Gap Insurance Refund Work?
Basically, GAP insurance is best for cars that may be financed for more than 48 months. If you are signing up for a long term finance agreement, GAP insurance may help you if you are unable to afford the monthly car payments.
So, if your finance term is longer, the amount you owe on your car will be longer than its worth. At this point, GAP insurance offers financial protection for that period of time.
To enjoy the benefits of GAP Insurance, you must satisfy the terms of eligibility. And, to be eligible, you must finance your vehicle through your own banks, credit unions, or lenders partnering with dealerships.
GAP insurance refund comes in handy if you are able to clear your debts earlier. For instance, GAP insurance will refund you premium charges for a car that is financed for 48 months but paid off in 24 months.
Why Should I Get GAP Insurance?
Getting GAP insurance coverage is a smart plan. Imagine having to still pay off your debts for a stolen car?
Although most lenders may not require one, it is important you get one to cover the loss where an unfortunate scene occurs. Basically, you will still pay for a car you’ve leased out in face of theft or destruction. Getting GAP coverage will come in time if such a situation arises.
GAP insurance makes sense for you if you wish to be in a position where you owe more for a vehicle than its worth.
When purchasing a car that depreciates rapidly like a Chevrolet Volt, it is important to get this insurance package. Also, get this insurance coverage for your vehicle if you are financing a vehicle that accrues high-interest rates or where other payments have been rolled over into the loan.
How Long Does it Take to Get a Gap Insurance Refund?
Getting a GAP insurance refund will definitely take some time. This is because of the procedure you must complete getting a refund.
Generally, it takes a few days to several weeks to get your gap insurance refund.
To begin the process, you would have to contact the insurance company. Sometimes, you may need to provide a replacement gap lease or loan policy before canceling.
How to Get GAP Insurance Refund
To get your insurance refund from GA, follow the steps below:
#1: Find your vehicle purchase agreement from the dealer.
The first step to getting an insurance refund from Gap is to find your paperwork. The agreement papers you signed when you bought the car must be provided. And, if you have misplaced your copies, your car dealer could help email your copies.
#2. Contact Gap Insurance provider
Once your paperwork is ready, inquire from your insurance provider about the steps you need to take to cancel your gap policy.
Usually, you may be asked to put your intent to cancel down in writing. This can be scanned and emailed or simply send a fax.
#3.Update your contact information
To avoid the check being sent to the wrong address or previous residence, you must update your address at the dealership’s insurance company.
#4. Get an Alternate Loan Coverage
To ensure a smooth transition, you should get details of your new coverage before canceling your old policy. Simply contact your American Family agent to get started.
#5. Return all Signed Paperworks Promptly
Simply return all documents after appending your signatures. The documents are required to expedite the process. Now, you can transfer money for Gap insurance refund to your current policy or simply put it in your bank.
How to get my GAP Insurance Refund After Trade In?
If you have paid off your vehicle early, you can get a refund for the amount of money they paid for this insurance coverage.
Also, if you trade your vehicle or sell it off, these steps below will aid you to get a GAP insurance refund:
Step 1: Get an Odometer Reading
To get a refund, you must know the mileage of your vehicle. So, let your dealer give your vehicle an odometer reading, verify it before taking your car to where it would be sold.
With this, you will get an odometer disclosure statement from the dealership where you are selling your car. This serves as an official statement of what the current mileage on the vehicle is.
Step 2: Contact your financial institution
If your auto loan has not been fully paid and you are trading your car, you can still get a refund for the unused portion of your gap insurance.
So, once you have the official odometer reading, you should contact the financial institution with whom you made your purchase.
The bank will send you a document once you take a new loan out and the vehicle loan is paid off. This document will reflect all the money borrowed alongside the gap insurance coverage.
You need these documents from the bank to get a refund.
Step 3: Cancel your insurance policy
Contact your insurance company directly once you have sold or traded your vehicle. you can also contact your auto dealership for the necessary paperwork to initiate coverage cancellation according to general.com.
Step 4: Send all the necessary documents
Basically, you must not cancel your gap insurance policy before the sale or trade.
To get a refund send the following to the insurance company. The company will cancel your insurance policy and issue a refund. Refunds usually come as a check and can take 4-6 weeks to get the refund.
- The documentations from the banks,
- Odometer disclosure statement from the car dealerships,
- Copy of your pay off letter
- Cancellation forms
How do I contact gap insurance?
You can contact GAP during business hours – Mondays -Fridays between 8;30am -5:00 pm.
To have your information processed, provide the following data, or click the contact button to begin.
- Your state of residence
- GapDirect policy number
- Copy of original loan/lease
- Insurance settlement documentation
- Loan number and lender/lessor contact information
A gap insurance refund makes it possible for you to recover what you do not use. To enjoy a Gap insurance refund, you must first be eligible and apply for a refund the right way.
This article explains what the gap insurance refund entails, how it works, and how to get a refund even when you sell your vehicle.
The step by step guide in this article will direct you to get your gap insurance refund easily and seamlessly.