Consider GAP insurance coverage refunds like that $20 invoice that you simply forgot about in your denims pocket after which discovered while you had been doing the laundry. Technically, the $20 was yours to start with, however it nonetheless seems like a present while you discover it. Proper?
Nicely, GAP insurance coverage refunds can provide you that very same feeling. Although the refund was actually your cash to start with and also you knew the refund was coming, it nonetheless feels such as you’re getting an sudden reward when it occurs.
Let’s get you in your option to discovering out when you’re eligible for a present (err, GAP insurance coverage refund) and get one.
What Is GAP Insurance coverage?
Earlier than we dive into the main points of GAP insurance coverage refunds, let’s go over the fundamentals of what GAP insurance coverage is.
GAP insurance coverage pays the distinction between the precise money worth (ACV) of your automotive and the quantity you continue to owe in your lease or your mortgage. So, when you took out a mortgage or leased your automotive (not recommended!), and your automotive will get totaled or stolen earlier than you’ve got an opportunity to repay your mortgage or lease, GAP insurance coverage will cowl the distinction.
Make sense? We wrote extra particulars about how GAP insurance works and why you want it here.
What Is a GAP Insurance coverage Refund?
True to its identify, a GAP insurance coverage refund reimburses insurance coverage coverage holders for the stability of the premium that’s unused.
So, for instance, suppose to procure GAP insurance coverage on your automotive since you borrowed a considerable amount of cash to purchase the automotive, and also you wish to hold your emergency fund within the occasion the automotive is totaled or stolen.
Two and a half years later, you’re in a position to repay your automotive mortgage sooner than anticipated. (Bravo!) In case you pay your insurance coverage invoice yearly and never month-to-month, you may get a refund for the GAP protection for that different half yr you already paid for.
GAP insurance coverage refunds can get just a little complicated when you begin including situations. No want to fret although. On this subsequent part, we’re going to spell out the nitty-gritty about how GAP refunds work in any scenario.
How Does a GAP Insurance coverage Refund Work?
Listed here are some conditions that present while you can and while you can’t get a GAP insurance coverage refund.
When You Can Get a GAP Insurance coverage Refund
Let’s begin with the excellent news. There are usually three conditions when you would cancel your GAP insurance coverage and get a refund:
1. You’re paying off your mortgage.
Paying off your car loan and eliminating that annoying month-to-month invoice (together with these absurd curiosity funds) is usually a nice feeling. Even higher? In case you pay your automotive mortgage off early, you’re eligible for a partial refund for the GAP protection that you simply haven’t used but.Right here’s why your refund is just partial. You’ve already used a portion of your GAP insurance coverage coverage whereas your mortgage was nonetheless energetic. So, you’ll solely get again a prorated refund for the half you haven’t already used.
2. You’re switching to a distinct insurance coverage firm.
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In case you’re not glad along with your insurance coverage supplier, you may swap to a distinct firm. When you cancel your coverage out of your unique supplier (be sure you have new automotive insurance coverage in place earlier than you cancel the unique insurance coverage), you’re eligible for a refund for the cancelled protection you didn’t use.Usually, when you cancel your insurance coverage inside 30 days after the coverage’s begin date, you may get a full refund (together with GAP insurance coverage prices). In case you cancel your insurance coverage after 30 days, your refund will likely be prorated. Examine along with your insurance coverage supplier on your coverage particulars.
3. You’re promoting or buying and selling your automotive.
In case you sell or commerce a automotive for which you’ve purchased GAP insurance coverage, you may get a refund on the quantity of protection you didn’t use. Be sure you wait to cancel your insurance coverage till after the automotive is legally offered or traded.
Right here’s an instance. Let’s say you initially determined to get a automotive that prices $30,000 and borrowed $25,000 to purchase it. You additionally purchased a yr’s price of GAP insurance coverage to protect yourself financially in case the automotive is totaled or stolen earlier than you’ve had an opportunity to pay down your $25,000 mortgage. (Sensible!)
After three months of protection, you wish to cancel your GAP insurance coverage. It may very well be for any of the explanations listed above (mortgage payoff, switching GAP insurance coverage corporations, otherwise you’re promoting/buying and selling your automotive). You’ll get a refund for the 9 months of the yr that you simply didn’t use your GAP insurance coverage protection. Good!
A fast observe on refunds from mortgage payoffs: When you present your GAP insurance coverage supplier your mortgage payoff discover, you’ll obtain a partial refund for the GAP protection that you simply haven’t used. Relying in your cause for canceling your GAP insurance coverage, wait till the automotive both legally now not belongs to you or your unique mortgage is formally now not in impact.
When You Can not Get a GAP Insurance coverage Refund
Excellent news once more. There’s just one scenario while you can’t get a GAP insurance coverage refund. Okay two, when you rely not having GAP insurance coverage within the first place.
However let’s speak concerning the one which counts. In case your insured automotive is said a complete loss and your GAP coverage pays out the distinction between the automotive’s worth and your mortgage stability, you received’t be eligible for a refund for the remaining months of protection. It is because the insurance coverage supplier figures they’ve already met (or exceeded) their obligation for the GAP protection to procure and are now not chargeable for payouts on the coverage.
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Learn how to Get Your Cash Again From Your GAP Insurance coverage Supplier
Now that we’ve gone over GAP refund necessities, it’s time to speak about really get one.
Issues for Canceling Your GAP Insurance coverage
Earlier than we get into the nuts and bolts of requesting a GAP refund, there are some things to consider that might sway your resolution a technique or one other:
- You’ll solely obtain a refund for the GAP insurance coverage that you simply haven’t used. For instance, when you cancel your coverage after three months of protection, you’ll solely get a refund for the remaining 9 months (when you paid for a yr of protection).
- The quantity of your refund relies on the way you pay your insurance coverage invoice. In case you pay month-to-month, you received’t get a refund since you’ve solely paid for the protection you’ve obtained to date. In case you pay your insurance coverage in a single lump sum, the quantity of your refund will rely on how far into your protection you had been while you canceled your coverage.
- When you cancel your coverage and request a refund, it usually takes between 4 and 6 weeks to obtain the cash.
- You must ask for a GAP insurance coverage refund. Most insurance coverage corporations don’t robotically provide them.
Directions for Canceling Your GAP Insurance coverage Coverage
Now for the step-by-step directions. The steps under assume that you simply purchased your GAP insurance coverage out of your insurance coverage supplier and never the automotive dealership. (Trace: It’s manner cheaper to get it out of your insurance coverage supplier.)
- Begin the refund course of by contacting your insurance coverage supplier. Inform them your identify, coverage quantity, and that you simply wish to cancel your GAP insurance coverage and get a refund for the remaining protection. Bear in mind, don’t do that till after your automotive is legally offered or traded or your mortgage is formally paid off.
- Collect and ship paperwork to your insurance coverage supplier that proves your automotive was traded, offered or that you simply paid off your mortgage early.
- Full and submit any varieties that your insurance coverage supplier requires for finishing the cancellation course of.
- If it appears unclear, reiterate to your supplier that you really want a refund for the unused GAP insurance coverage protection. Most insurance coverage supplier refunds are despatched to you within the type of a verify inside 4 to 6 weeks of your cancellation request.
GAP Insurance coverage Refund FAQs
There are additionally some distinctive questions that we didn’t cowl on this article. We collected solutions to these questions right here.
1. Can I get a refund if I by no means used the GAP protection?
No. You can not get a refund merely since you by no means filed a GAP insurance coverage declare.
2. Can I file a GAP insurance coverage refund lawsuit?
Sure, however earlier than you begin haggling with the monetary establishment that gave you the mortgage (they don’t have something to do along with your GAP insurance coverage), contact your insurance coverage firm. The insurance coverage firm might be able to present the refund with out having to file a lawsuit. Be sure you hold all information of cellphone calls in addition to written and e mail correspondence.
3. Can I get a GAP insurance coverage refund if my automotive mortgage is refinanced?
In case you refinance the sensible manner and go along with a shorter mortgage time period (and hopefully a decrease rate of interest), you’ll repay your automotive quicker. So, you won’t want GAP insurance coverage anymore, otherwise you would possibly have the ability to do away with it ahead of you’ll have when you didn’t refinance. Examine your mortgage paperwork to see if GAP insurance coverage remains to be obligatory. In case you now not want it, we suggest contacting your insurance coverage agent for assist getting a refund for the unused premium.
Work With a Professional to Get Your GAP Insurance coverage Refund
In terms of placing more money in your pocket with a GAP insurance coverage refund, one of the simplest ways to chop by means of the crimson tape is by working with an skilled insurance coverage skilled.
Our Endorsed Native Suppliers (ELPs) are unbiased automotive insurance coverage specialists and can have the ability to inform you the neatest and quickest option to get your GAP insurance coverage refund.
