GAP Insurance Refund: Is It Possible And How Do I Get It
You can get a GAP insurance refund for the coverage you didn't use if you pay your vehicle off early. You must notify the insurer and show them a payoff notice to receive your GAP insurance refund. The GAP insurance refund after refinancing can also be received in some situations.
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Scott W. Johnson
Licensed Insurance Agent
Scott W Johnson is an independent insurance agent in California. Principal Broker and founder of Marindependent Insurance Services, Scott brings over 25 years of experience to his clients. His Five President’s Council awards prove he uses all he learned at Avocet, Sprint Nextel, and Farmers Insurance to the benefit of his clients. Scott quickly grasped the unique insurance requirements of his...
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UPDATED: Aug 2, 2024
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Aug 2, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- When you buy a new car, its value begins to depreciate immediately
- GAP insurance policy bridges the “gap” between what you owe on an auto loan and the car’s depreciated value
- You can request a refund on a portion of your GAP coverage from your GAP insurance provider if you pay off your loan early
When you buy a new car, you may consider adding the optional GAP insurance coverage along with your required liability coverage. GAP insurance is an optional add-on available through many car dealerships and car insurance companies and is used to repay the remaining loan balance if the leased or financed car is declared a total loss or gets stolen.
Once the car’s value is more than what drivers owe, they will no longer need their GAP coverage. If you decide to cancel your GAP insurance policy early, luckily, you may be able to get a refund. Before we dive into the details of GAP insurance refunds, let’s find out what GAP insurance is and how it works.
What is GAP insurance and how does it work?
One add-on feature you will be offered if you are financing the car is GAP insurance. You may not see the importance of carrying supplemental protection to pay off your loan if you do not really understand how claims valuations are calculated.
Insurers are not going to simply pay off your loan when you file a claim and the vehicle is a total loss. Instead, they are going to determine how much the car was worth at the time of the incident. According to Kelley Blue Book, the insurer is only responsible for paying up to the Actual Cash Value of the car if it is totaled or needs significant repairs. Actual Cash Value, in simple terms, is the replacement cost of the car minus depreciation.
Unless you put down a large deposit, you will more than likely be upside down on your loan from the moment you drive off of the lot.
You are considered upside down on a loan when your car is worth less than the amount you owe.
If your car is determined to be a total loss, your insurer will only issue a check for the actual depreciated value of the car minus your deductible. You will then be left to pay the difference on the balance on the loan out of pocket.
Read more:
- How GAP insurance works after totaling a car
- Do you need GAP insurance on a used car?
- How does GAP insurance work after totaling a car?
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Should I get GAP coverage?
Including GAP insurance coverage is a wise consideration, as it has the potential to save you significant money in the event of an accident or theft of your vehicle. When leasing a vehicle, individuals retain responsibility for the vehicle’s cost in the event of an accident. This raises the question: why do you need GAP insurance for a leased car?
GAP could be a great asset in the case of leasing a vehicle. When financing a vehicle, GAP insurance has value. Vehicles depreciate, some more quickly than others. With that being the case, you would want to research before making the purchase and also consider a GAP insurance policy.
When is GAP a good investment?
If you are financing a car with no down payment or a small down payment of 10% or less, it is in your interest to buy GAP. It is also in your interest to have the coverage if you have a longer loan term between five and seven years since this is when cars are worth half of their original value.
GAP may not be necessary for the following situations:
- You put a large down payment
- You plan to pay off your loan immediately
- You get a great deal on the sales price
You should know the details about the advantages and disadvantages before you make a choice at the dealership.
Where to purchase GAP insurance?
GAP insurance is able to be added to your auto insurance coverage policy and included in your insurance coverage premiums It can also be bought as a separate policy from a GAP insurance company via lenders. You should be sure to verify with your provider that they offer it. Read the fine print in the contract, and if GAP insurance is not something you wish to add, then have the GAP coverage removed.
How much GAP insurance will cost will vary depending on the provider you’ve chosen. It could range from under $10 monthly payment to under $50 for the year. So, it will be important to research the providers and shop around. The dealership could be charging something expensive, and you could get a cheaper rate if you just added it to your existing auto insurance policy. Your best bet is to call your auto insurance company and ask whether you can add it to your existing policy.
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When should I not purchase GAP insurance?
Every driver does not need GAP insurance. If the car costs more than the payment amount, then the coverage is pointless. Having a GAP waiver is another reason to avoid purchasing GAP insurance. If there is a total loss, the lender has agreed to waive the difference between the amount owed on the car and the actual cash value.
Buying GAP insurance coverage through the GAP insurance company the dealership recommends could cost more money in the long run. Basically, if you finance you will be paying more for your GAP insurance premium because of the interest charged by your finance company in addition to the money financed to buy the car.
How can you get a GAP refund?
Is GAP insurance refundable? If you pay your vehicle loan off early, in this situation you will be entitled to a partial refund for the unused portion of the GAP insurance coverage when your GAP insurance cancelation is processed. When you are financing your car in the finance office, the premiums for coverage are calculated based on the purchase price and the loan term.
If you reduce the period of time of your loan term, you will not get all the coverage that you paid for in your loan.
Because of this, the company must refund you all the unused premiums. You must notify the insurer and show them a payoff notice in order to have the check issued.
GAP Insurance Refund After Payoff Notice
To get a GAP insurance refund check, you will want to check your policy’s terms and conditions on your GAP insurance contract. This will ensure your eligibility for a refund. GAP insurance coverage companies may have various terms as well as fees. You could likely get a GAP refund if the contract was canceled within 30 days of getting your coverage, or policy.
Getting a GAP insurance refund comes with some options. Ways to get a refund can include: emailing, phone, letter writing, visiting an office in person, and more. It’s imperative that you verify with your provider about the correct option.
Can I get a GAP insurance refund from a dealership?
You could qualify for a dealership’s GAP insurance refund, however, this depends on the terms of the contract. If you just bought your car a few months ago, chances are that you’ll be able to get a refund. Most dealerships require that the premium for the GAP lease or loan protection is paid at closing ( which may extend for several years).
Getting a GAP insurance refund from your dealer can take some time. First, you’ll need to contact the insurance company that the dealership works with. Also, you’ll probably need to find a replacement GAP lease or loan policy before canceling.
What are the alternatives to dealer GAP insurance?
You are not obligated to buy a GAP insurance policy at the car lot. Many standard car insurers offer their own coverage for newer cars.
Ask about this option, and you can simply add on GAP when you add the car to your policy. The benefit is that when the car is paid off, the coverage can be removed.
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Navigating GAP Insurance Refunds
GAP Insurance Refund Scenarios
Early Payoff of a Gap Insurance Refund
When you pay off your car loan early, you are entitled to a refund for the unused portion of your GAP insurance. Notify your GAP insurance provider and submit proof of loan payoff. The insurer will calculate and issue a refund.
Gap Insurance Refund Through the Dealership
- Contact Dealership: Reach out to the dealership where the GAP insurance was purchased.
- Provide Documentation: Submit all necessary paperwork, including proof of loan payoff.
- Refund Processing: The dealership processes the refund and issues the amount owed.
General Refund Question
Can Gap insurance be refunded? Yes, GAP insurance can be refunded if the loan is paid off early or under specific conditions outlined in the policy.
GAP Insurance Refund Processes
Gap Refund After Payoff
- Pay Off Loan: Complete the vehicle loan repayment.
- Notify GAP Insurer: Inform your GAP insurance provider.
- Refund Calculation: The insurer calculates the unused premium.
- Receive Refund: The calculated refund is issued to the policyholder.
Gap Cancellation Refund
For a cancellation refund, request cancellation from your insurer and provide the necessary documentation. The insurer will process and refund the unused premium.
Refund and Reimbursement Procedures
Gap Reimbursement
In the event of a total loss, file a claim for Gap insurance reimbursement. Submit the required documents to your insurer, who will reimburse the difference between your loan balance and the car’s actual cash value.
Specific Refund Conditions
Gap Returns After 30 Days
- Check Policy Terms: Review the Gap insurance policy for refund conditions after 30 days.
- Submit Request: Contact your insurer to request a refund.
- Receive Refund: If eligible, the insurer will process the refund for the remaining coverage period.
Understanding Gap Waivers and Warranties
Gap Waiver Refund Amount
The refund amount for a GAP waiver is based on the unused portion of the GAP waiver coverage. Provide proof of loan payoff to the insurer or lender to receive the refund.
Gap Waiver Refund Auto Loan
- Check Loan Agreement: Review your auto loan agreement for GAP waiver refund eligibility.
- Notify Lender: Inform your lender of the early loan payoff.
- Receive Refund: The lender processes and issues the GAP waiver refund.
Gap Warranty Refund
For a GAP warranty refund, check your GAP warranty terms for eligibility. Contact your warranty provider and request a refund, providing the necessary documentation. The provider will issue a refund for the unused warranty period.
Gap and Extended Warranty Refund
If you have both GAP insurance and an extended warranty, follow similar procedures for each refund. Ensure you meet the respective policy terms and submit documentation accordingly to receive the refunds.
By following these steps and understanding the various scenarios, you can effectively manage and claim your GAP insurance refunds.
Comprehensive Guide to Gap Insurance Refunds
Understanding Gap Insurance Refunds
Gap Insurance Refund After Early Payoff
When you pay off your vehicle loan early, you are entitled to a GAP insurance refund for the unused portion of your coverage. Contact your insurer and provide a payoff notice to initiate the refund process.
Gap Insurance Refund After Paying Off the Car
Once your car loan is fully paid off, you can request a GAP insurance refund. This involves notifying your insurance provider and supplying proof of loan payoff to receive the refund.
Specific Situations for Gap Insurance Refunds
Gap Insurance Refund After Total Loss
If your car is declared a total loss, you may be eligible for a GAP insurance refund. This refund will be for the unused portion of your policy after the settlement of your loan.
Gap Insurance Refund After Trade-In
When trading in your vehicle, you can request a GAP insurance refund for the remaining coverage period. Provide documentation of the trade-in to your insurer to process the refund.
Gap insurance refund after voluntary repossession
In cases of voluntary repossession, you can still apply for a GAP insurance refund. Contact your insurer with the necessary details to claim the unused portion of your GAP insurance.
Practical Tools and Documentation
Gap Insurance Refund Calculator
Utilize a GAP insurance refund calculator to estimate the refund amount you are entitled to based on your specific situation and the remaining term of your policy.
Gap Insurance Refund Letter
Draft a Gap insurance refund letter to formally request your refund. Include relevant details such as your policy number, loan payoff date, and contact information.
Policies and Procedures
Gap Insurance Refund Policy
Review your Gap insurance refund policy to understand the terms and conditions under which you can receive a refund. This policy outlines the procedures for various refund scenarios.
Gap Refund Settlement Amount Per Person
Understand how the Gap refund settlement amount per person is calculated. This typically depends on the unused portion of your GAP insurance coverage.
Gap Waiver Refund Amount
Check the gap waiver refund amount, which is the refund you receive when a GAP waiver is applied to your auto loan after it is paid off.
Dealer-Specific Refunds
Gap Insurance Refund from the Dealer
If you purchased GAP insurance from a dealer, you could request a refund directly from them. The process may vary, so consult your dealer’s refund policy.
Gap Refund from the Dealership
Similar to the above, ensure you follow the dealership’s specific procedures to receive your GAP refund from the dealership.
Final Steps
Gap Refund Check
Once approved, you will receive a Gap refund check for the unused portion of your GAP insurance. Ensure all required documentation is submitted to avoid delays.
Gap Warranty Refund
If your GAP insurance included a warranty, you could also request a gap warranty refund for any unused warranty coverage.
Comprehensive Reimbursements
Gap Coverage Refund
Ensure you understand the full scope of your gap coverage refund to maximize the amount you receive.
Gap Insurance Reimbursement
Apply for a Gap insurance reimbursement for any amounts you are entitled to after settling your loan or in the event of a total loss.
Additional Considerations
Gap Refund Policy
Keep a copy of your gap refund policy handy for reference during the refund process. This document provides valuable information on eligibility and procedures.
Gap Waiver Refund Auto Loan
A gap waiver refund auto loan can provide significant financial relief. Make sure to inquire about this option when paying off your loan.
By understanding and utilizing these procedures, you can efficiently manage and claim your GAP insurance refunds in various scenarios.
Understanding Bridgecrest Gap Insurance
Bridgecrest Gap insurance is a type of protection designed to cover the difference between your car’s actual cash value and the remaining balance on your auto loan in the event of a total loss. This insurance can be particularly useful if you owe more on your car than it’s worth, which is a common scenario in the early years of a loan. By having Bridgecrest Gap insurance, you can avoid financial strain and ensure that you are not left with a significant amount of debt after your vehicle is deemed a total loss.
If you are considering whether to keep or remove your gap insurance, you might wonder, “Can I take Gap insurance off my car?” The answer generally depends on your individual situation and the terms of your auto loan. If you’ve paid down your loan significantly and your car’s value now exceeds or closely matches the loan balance, you might decide that gap insurance is no longer necessary. However, it is essential to review your policy and consult with your insurance provider to understand the implications and ensure that removing the coverage is the right decision for your financial well-being.
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Understanding Gap Insurance Refunds
When you pay off your car loan, you might be eligible for a gap insurance refund if you had a gap insurance policy in place. A Gap insurance refund when the car is paid off typically occurs because the insurance coverage is no longer needed once the loan balance is settled. Many insurance providers offer a pro-rated refund for the unused portion of the coverage. To initiate this process, you will need to contact your insurance provider and provide proof that the loan has been fully paid. They will then review your policy and issue a refund based on the remaining term of your coverage.
Additionally, it’s important to be aware of the Gap refund from the dealership if you purchased your gap insurance through a dealership. Dealerships often offer gap insurance as part of the vehicle purchase process, and in some cases, they might have different refund policies compared to independent insurance providers. If your car loan is paid off early, you should contact the dealership to inquire about any potential refunds. The dealership will guide you through their specific refund process, which might involve returning any unused insurance premiums or adjusting your finance contract.
Case Studies: Gap Insurance Refund
Case Study 1: Gap Insurance Refund After Early Vehicle Payoff
John purchased a new car and added GAP insurance coverage to his policy. However, he paid off his vehicle loan earlier than expected.
John contacted his insurance company, provided them with a payoff notice, and requested a refund for the unused portion of his GAP insurance coverage. The insurer processed his request and issued a partial refund, reimbursing him for the coverage he didn’t use.
Case Study 2: Gap Insurance Refund After Refinancing
Sarah refinanced her car loan to get a better interest rate. As a result, the remaining balance on her loan decreased significantly. Sarah realized that she no longer needed the full coverage provided by her GAP insurance policy.
She contacted her insurance company and discussed her situation. The insurer reviewed her refinancing documents and determined that she was eligible for a refund. Sarah received a partial refund for the remaining unused portion of her GAP insurance coverage.
Case Study 3: Dealership Gap Insurance Refund
Mike bought a new car from a dealership and opted for the GAP insurance offered by the dealer. A few months later, he discovered that he could get a better deal on GAP insurance from a different provider.
Mike decided to cancel the dealership’s GAP insurance and requested a refund. He contacted the insurance company recommended by the dealership and followed their instructions to initiate the cancellation process.
After obtaining a replacement GAP insurance policy, Mike received a refund for the unused portion of the dealership’s coverage.
Gap Insurance Refund: The Bottom Line
Auto insurance companies, dealerships, financial institutions such as banks and credit unions, and other third parties provide gap insurance products.
You can often get a prorated refund for GAP insurance, i.e the unused portion of your GAP insurance. If you recently purchased the policy, depending upon your GAP insurance company, you can receive a full refund if you cancel within a certain time period (typically 30 days).
If you want to find car insurance with a supplemental GAP option, you can start comparing quotes.
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Frequently Asked Questions
What is Gap insurance and how does it work?
GAP insurance is an optional add-on that repays the remaining loan balance if your leased or financed car is declared a total loss or gets stolen. It covers the difference between the actual cash value of the car and the amount you owe on the loan.
Should I get Gap coverage?
Adding GAP insurance coverage can be a good idea, especially if you have a small down payment or a long loan term. It can save you money if your vehicle is in an accident or stolen.
Where can I purchase Gap insurance?
GAP insurance can be added to your existing auto insurance policy or purchased separately from a GAP insurance company. It’s important to shop around and compare prices before making a decision.
When should I not purchase Gap insurance?
GAP insurance may not be necessary if your car costs more than the payment amount or if you have a GAP waiver from your lender. Buying GAP insurance through the dealership recommended by the GAP insurance company could also cost more in the long run.
How can I get a Gap refund?
If you pay off your vehicle loan early, you may be entitled to a partial refund for the unused portion of your GAP insurance coverage. You must notify the insurer and show them a payoff notice to receive the refund.
Can I get a Gap insurance refund from a dealership?
It depends on the terms of the contract. If you recently bought your car and the premium for the GAP insurance was paid at closing, you may be able to get a refund. Contact the insurance company recommended by the dealership for more information.
What are the alternatives to dealer Gap insurance?
You are not obligated to buy GAP insurance from the dealership. Many standard car insurers offer their own coverage for newer cars. You can add GAP coverage to your existing policy and remove it when the car is paid off.
How do I cancel my Gap insurance?
To cancel your GAP insurance policy, you should review the terms and conditions of your contract and follow the instructions provided by your GAP insurance company. Contact them through email, phone, letter writing, or in-person visits to initiate the cancellation process.
Is Gap insurance refundable?
In many cases, you can receive a prorated refund for the unused portion of your GAP insurance. Some companies offer full refunds if the policy is canceled within a certain time period, typically 30 days.
Can you remove Gap insurance from a car loan?
Yes, you can typically remove GAP insurance from your car loan. Contact your lender or insurance provider to initiate the cancellation process.
Can I remove Gap insurance from my car loan?
Yes, you have the option to remove GAP insurance from your car loan by contacting your insurance provider or lender.
Can I remove Gap insurance from my car?
Yes, you can remove GAP insurance from your car by cancelling the policy with your insurance provider or lender.
Can you cancel Gap insurance after 2 years?
Yes, you can cancel Gap insurance after 2 years. The ability to cancel and receive a refund may depend on the terms of your insurance policy.
Can you cancel Gap insurance purchased from a dealership?
Yes, you can cancel Gap insurance purchased from a dealership. Contact the dealership or the insurance provider to initiate the cancellation.
Can you get money back from Gap insurance?
Yes, you can get a refund for GAP insurance if you cancel the policy before its expiration or if you pay off your vehicle early.
How do I cancel Gap insurance?
To cancel Gap insurance, contact your insurance provider or lender and request cancellation. Follow their specific procedures and provide any required documentation.
How do I cancel Gap insurance from a dealership?
To cancel GAP insurance purchased from a dealership, contact the dealership’s finance department or the insurance provider associated with the policy.
How do I get a refund for canceling Gap insurance?
To get a refund for canceling Gap insurance, contact your insurance provider or dealership, provide necessary documentation such as a payoff notice, and request a refund.
How do I get a Gap car insurance refund?
Contact your insurance provider, provide documentation showing early payoff or cancellation, and request a refund for the unused portion of your GAP insurance.
How do I get my Gap insurance money back?
To get your GAP insurance money back, contact your insurance provider or lender, provide proof of early payoff or cancellation, and request a refund.
How does Gap insurance refund work?
A GAP insurance refund typically involves canceling the policy and receiving a refund for the unused portion of the premium, prorated based on the time left on the policy.
How does Progressive loan/lease payoff work?
Progressive’s loan/lease payoff coverage is designed to cover the gap between what you owe on your vehicle and its actual cash value if it’s totaled or stolen.
How is Gap insurance calculated?
GAP insurance premiums are calculated based on factors like the cost of the vehicle, loan term, and coverage options chosen. Contact your insurance provider for specific calculations.
How long does it take for Gap insurance to pay?
Gap insurance typically pays out after your primary insurance settles a claim, which can vary but usually occurs within a few weeks of the claim being filed.
How long does it take to get a Gap insurance refund?
The time it takes to receive a GAP insurance refund can vary but typically ranges from a few weeks to a month after cancellation and approval.
How much is a Gap insurance refund?
The amount of a GAP insurance refund depends on factors such as when you cancel, how much you’ve paid, and the terms of your policy. Contact your provider for specifics.
How much will my Gap insurance refund be?
Your GAP insurance refund will be the unused portion of your premium, calculated based on the time left on your policy and any applicable fees.
How to calculate a Gap insurance refund?
To calculate a GAP insurance refund, determine the total premium paid, the remaining time on the policy, and any cancellation fees. Your insurance provider can assist with the exact calculation.
How to cancel Gap insurance?
To cancel Gap insurance, contact your insurance provider, provide necessary information such as your policy number and vehicle details, and request cancellation.
How to cancel Gap insurance from dealers?
Contact the dealership’s finance department or the insurance provider associated with your GAP insurance, follow their cancellation procedures, and request cancellation.
How to cancel my Gap insurance?
Contact your insurance provider, follow their cancellation process, which may include providing a written request or completing a cancellation form, and ensure all requirements are met.
How to get a refund on Gap insurance?
To get a refund on GAP insurance, contact your insurance provider or dealership, provide proof of early payoff or cancellation, and request a refund for the remaining premium.
How to get Gap insurance refund after refinance?
After refinancing your vehicle, contact your insurance provider, provide documentation of the refinance terms and vehicle payoff, and request a refund for any unused GAP insurance coverage.
How to get money back from Gap insurance?
Contact your insurance provider or dealership, provide necessary documentation showing cancellation or early payoff of your vehicle, and request a refund for your GAP insurance coverage.
Can I get Gap insurance after I purchase my car?
Yes, you can get gap insurance after you purchase your car. Many insurance providers offer gap insurance as an add-on to your existing auto insurance policy or as a standalone policy. It’s a good idea to consider purchasing gap insurance soon after buying your vehicle, especially if you have a new or expensive car and a substantial loan balance.
How to get a Gap insurance refund from the dealership online?
Verify Your Eligibility Confirm that you are eligible for a refund by checking if you have paid off your car loan or if you’ve reached the end of the coverage term. Refunds are typically issued for the unused portion of the policy.
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Enter your ZIP code below to view companies that have cheap car insurance rates.
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Scott W. Johnson
Licensed Insurance Agent
Scott W Johnson is an independent insurance agent in California. Principal Broker and founder of Marindependent Insurance Services, Scott brings over 25 years of experience to his clients. His Five President’s Council awards prove he uses all he learned at Avocet, Sprint Nextel, and Farmers Insurance to the benefit of his clients. Scott quickly grasped the unique insurance requirements of his...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.