Think of a GAP insurance refund as a $20 fee you forgot in your denim pocket and found when you did the laundry. Practically, $20 is yours to start with, but it still looks like a gift when you find it. Right?
Well, a GAP insurance refund can give you the same feeling. Even if the refund is really your money to begin with and you understand that it’s coming, it’s still likely that you’re getting an unexpected gift when it does.
Let us help you on your way to see if you qualify for the prize (err, GAP insurance refund) and how to get it.
Before we dive into GAP insurance refund information, let’s review the basics of what GAP insurance is.
GAP insurance pays for the difference between the real cash value (ACV) of your car and the amount you still owe on your rental or loan. So, if you loan or rent your car (not recommended!), and your car is taken or taken away before you can pay off your loan or rent, GAP insurance will cover the difference.
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Makes sense? We’ve compiled more information about how GAP insurance works and why you need it here.
As the name implies, the GAP insurance refund reimburses the insured for the extra premium balance.
So, for example, you buy GAP insurance for your car because you earned enough money to buy a car, and you want to save your emergency money in case the car is picked up or taken away.
2 and fifty percent years later, you can pay off your vehicle loan earlier than expected. (Bravo!) If you pay your insurance costs annually instead of monthly, you can get reimbursed for GAP coverage for the fifty percent of the year you currently spend.
GAP insurance refunds can be a bit confusing once you start to enter the problem. But there’s no need to worry. In this next area, we will most likely cover the basics of how GAP refunds operate under any circumstances.
Here are some circumstances that indicate when you can when you can’t get a GAP insurance refund.
Let’s start with the profit. There are usually 3 circumstances when you can terminate your GAP insurance and get reimbursed:
- You pay off your loan.
Paying off your vehicle loan and eliminating those annoying monthly expenses (consisting of ridiculous resettlement rates) can be an overwhelming feeling. Also better? If you pay off your vehicle loan early, you’re eligible for a partial refund for any GAP coverage you haven’t used. This is why your refund is only partial. You have currently used part of your GAP insurance coverage while your loan is still active. So you’ll only get back a prorated refund for components you haven’t used at this time.
- You switch to different insurance companies.
If you are not satisfied with your insurance provider, you can turn to different companies. Once you terminate your plan from your original provider (make sure you have new car insurance before you terminate your original insurance), you are eligible for reimbursement for any terminated coverage you did not use. Usually, if you terminate your insurance within thirty days after the day the policy commences, you can get a full refund (consisting of the cost of the GAP insurance). If you terminate your insurance after thirty days, your refund will be prorated. Check with your insurance provider for your plan information.
- You sell or trade your car.
If you sell or use a car you purchased with GAP insurance, you can get reimbursed for the amount you didn’t use. Make sure you hold off on terminating your insurance until the car is legally sold or traded.
Here is an example. Let’s say you initially decided to buy a car for $30,000 and earned $25,000 to buy it. You also purchase a year’s worth of GAP insurance to protect your own economy if the car is taken or taken away before you can repay your $25,000 loan. (Wise !)
After 3 months of coverage, you want to terminate your GAP insurance. It may be due to one of the factors mentioned above (a gift of a loan, switching GAP insurance providers, or you selling/trading your car). You will be reimbursed for 9 months of the year when you do not use your GAP insurance coverage. Very nice!
Keep in mind about refunds on loan payments: Once you show your GAP insurance provider your gift notification of your loan, you’ll receive a partial refund for any GAP coverage you haven’t used. Depending on your reasons for terminating your GAP insurance, hold off until the car is no longer legally coming from you or your original loan is officially no longer in effect.
Great information again. There is only one situation when you cannot get a GAP insurance refund. Alright 2, if you don’t have GAP insurance to begin with.
But let’s discuss one important one. If your collateral car is declared in default and your GAP plan pays the difference between the value of the car and your loan balance, you will not be eligible for reimbursement for the remaining month of coverage. This is because the insurance provider number they currently meet (or exceed) their responsibility for the GAP coverage you purchased and are no longer responsible for the payment on the plan.
Since we’ve covered the terms of a GAP refund, it’s time to discuss how to get one.
Before we get into the nuts and bolts of asking for a GAP refund, there are a few points to consider that can convince your choice one way or another:
Now for detailed instructions. The actions listed below assume you purchased GAP insurance from your insurance provider and not from an auto dealer. (Tip: It’s much cheaper to get one from your insurance provider.)
There are also some unique questions that we don’t cover in this article. We put together the solutions to those questions here.
No. You can’t get reimbursed just because you never made a GAP insurance claim.
Yes, but before you start bargaining with the monetary organization that gave you the loan (they have nothing to do with your GAP insurance), contact your insurance company. Insurance companies may have the ability to provide refunds without filing a lawsuit. Make sure you keep all phone call documents as well as written and email communications.
If you refinance the prudent way and go with a much shorter loan call (and hopefully a decreased passion rate), you’ll get your car done quicker. So you may not need GAP insurance anymore, or you may be able to get it sooner than you have if you don’t refinance. Check your loan documents to see if GAP insurance is still required. If you no longer need it, we recommend contacting your insurance representative for assistance getting reimbursed for the additional premium.
When it comes to putting extra money in your pocket with a GAP insurance refund, the best way to cut through the red tape is to work with a skilled insurance professional.