Yes, gap insurance covers theft if the car is deemed unrecoverable or if the car is recovered but has sustained enough damage to total it. Gap insurance pays for the difference between a car’s actual cash value (ACV) and the auto loan or lease balance if the car is declared a total loss due to theft or an accident.
Gap insurance companies usually require a waiting period of around 30 days before a stolen car can be deemed impossible to recover. After this waiting period, most gap insurance companies will ask for a copy of the police report detailing the theft before agreeing to pay for a claim.
On the other hand, if a car is recovered after being stolen, gap insurance will only pay if it’s considered “totaled.” Each state has different rules on what constitutes a total loss, based on the estimated price of repairs compared to the car’s value.
To receive a gap insurance payout for a stolen car, get a copy of the police report, file a claim with your standard insurer, and then file a claim with your gap insurance provider. Gap insurance companies thoroughly investigate claims for stolen cars to prevent fraud, so expect a wait before receiving a check.
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