Gap insurance claims are how insured drivers get a payout for the difference between their car’s loan or lease balance and its actual cash value (ACV) after a total loss. To file a gap insurance claim, drivers must contact their insurer and provide documentation showing the car’s value and its coverage details. Depending on the insurance company, you might be able to file a gap insurance claim in person, over the phone, or online.
What You Need for a Gap Insurance Claim
Copy of your original gap contract – available from your gap insurance provider
Original sales agreement – available from the dealership where you got your car
Manufacturer’s invoice or other document showing the vehicle’s original value – available from the dealership
Financing contract for the lease or loan – available from the dealership, bank, or credit union that holds your lease or loan
Payment history for the lease or loan – available from the dealership, bank, or credit union
Valuation report – available from your standard insurance company
Copy of the check from the insurer paying for the total loss – available from your standard insurance company
Insurance settlement statement breaking down the amount on the check – available from your standard insurance company
Police report – available from your local authorities
Although these documents are frequently required, every insurer has slightly different instructions for filing a gap claim. Most providers include lists on their websites, and you can always call or email your gap insurer to verify that you have everything you need. In addition, make sure that your gap insurance provider has your current contact information.
Most gap insurers will send a check, usually directly to the auto lease or loan provider, within four to six weeks if your claim is accepted. But you can expedite the process by staying on top of any requests for additional paperwork and by following up with your insurer with any questions or to check on the status of your claim.
Gap insurance takes 5-45 days to pay the policyholder after a claim is filed. For drivers to receive a gap insurance payout, the car first needs to be declared a total loss and the insurance company needs to accept the claim.
State laws also dictate how long an insurance company has to pay for a claim. For example, insurers in Texas must pay within five days after accepting a claim. Some other states, like Massachusetts, do not have a specific limit, saying only that an insurer must pay within a “reasonable” amount of time.… read full answer
Insurance companies will generally declare a car a total loss within 30 days of the initial claim being filed. However, more complicated situations take longer to settle, such as accidents involving multiple drivers, medical bills, or an unclear fault determination. But once the car has been officially established as a total loss and the insurer agrees to pay for gap coverage, the company will begin to process the gap payment. Since gap insurance pays for the difference between a car’s actual cash value (ACV) and the balance on its loan or lease, gap insurance payments are usually sent straight to the lessor or lender.
To get the fastest possible gap insurance payout, be sure to check your policy details and follow any instructions from your insurance company. For example, some insurers require you to keep making payments to your lender or lessor while the claim is being investigated. Also make sure to send the insurance company any necessary documents, like a copy of the police report, and promptly sign and return all paperwork. And if needed, check your state’s laws to see if there’s a specific window during which your gap insurer is required to pay.
After a car is totaled, gap insurance covers the balance between what is owed on a driver’s loan or lease contract and what is paid to the lender by their collision or comprehensive insurance policy, or another driver’s liability insurance. A claim must be filed and verified before a gap insurance provider will make a payment.… read full answer
The policyholder files a claim with their gap insurance provider as soon as the car is declared totaled by their primary insurance provider.
The gap insurance provider will verify the car has been totaled due to a covered cause.
The driver’s primary insurer pays for the actual cash value of the vehicle, minus any applicable deductible.
The gap insurance provider pays the difference between the primary insurance payout and what’s still owed on the loan/lease contract.
An insurance company will “total” a car when the damage to the vehicle is so severe that the cost to repair it exceeds a certain percentage of the car’s actual cash value (ACV), depending on the insurance company’s policies and state law.
If you think you might need gap insurance coverage, contact your primary insurance provider, and possibly your lender, to see if gap insurance makes sense for your personal situation. Some gap insurance providers only sell policies to original loan/lease holders within a short period of time after the contract is signed, but others will sell a driver gap insurance as long as there is a need, no matter the age/condition of the vehicle.
Finally, it’s important to note that gap insurance is different from loan/lease payoff plans, which customers can purchase at any time if they have an active contract on their car. While gap insurance will pay the entire difference between a financed vehicle’s ACV and the contract’s balance, and often any deductibles, loan/lease payoff plans only pay a maximum percentage of a car’s ACV and don’t generally cover deductibles.
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