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You can cancel gap insurance by gathering your policy details and contacting your gap insurance provider directly. To cancel gap insurance on a leased vehicle, you may need to also show proof of a new gap insurance policy, depending on the details of your contract.
If you still owe more on a loan or lease than your vehicle is worth, it may not be a great idea to cancel gap insurance. Plus, gap insurance is a relatively inexpensive way to protect yourself from owing money on a car that you can’t even use after it’s totaled in an accident.
However, if you currently owe less than the actual cash value of your car, you can likely cancel gap insurance without any repercussions.
How to Cancel Gap Insurance in 5 Steps
Step One: Review your contract details.
It is important to look over your contract from when you originally purchased gap insurance to make sure there are no contingencies, such as gap insurance being required as part of your loan or lease. Your policy documents will also have the contact information for the insurer.
It is possible that if you cancel your gap insurance within a certain timeframe, you may be able to get a refund for what you paid.
Step Two: Gather your information.
In order to cancel gap insurance, you’ll need to gather the details of your policy, in addition to information about the covered vehicle and drivers. If your contract specifies that gap insurance is required, you will need the policy information for a new gap insurance plan, too.
Step Three: Contact your gap insurance provider.
Once you’ve gathered all of your necessary information, reach out to your gap insurance provider. Your contract should explain whom to contact, whether it is a well-known insurance company or a gap insurance agent that works directly for a dealership.
They will ask you to provide the details of your policy and any new policy you have purchased, if needed. This is also the opportunity to discuss with them whether or not you’ll be refunded for unused portions of your policy.
Step Four: Pay any necessary cancellation fees.
You may need to pay a cancellation fee to stop gap insurance or have a cancellation fee removed from your gap insurance refund. That information should be provided in your policy documents.
Step Five: Request verification that the gap insurance policy has been canceled.
When canceling your gap insurance, be sure to request verification that the policy has been canceled. Contact your insurer again if you do not receive verification in a timely manner.
To learn more, check out WalletHub’s guide to gap insurance.
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