WalletHub, Financial Company
You can get a gap insurance refund for unused premiums if you paid for coverage up front and then canceled it early. If you are cancelling within 30 days after the policy’s start date, you might be able to get a full refund, minus any cancellation fees. In other cases, only a partial refund may be possible. The details will depend on your policy and your state’s laws.
When You Can Get a Gap Insurance Refund
- You are paying off, selling, or trading in the covered car.
- You are switching to a different gap insurance company.
- Your loan balance is no longer more than the car’s actual value, though it’s best to leave a cushion of $1,000-$2,000.
If you need a gap insurance refund because you’re selling or trading in the car, be sure to wait until the car no longer legally belongs to you before canceling your gap insurance. Then, you will need to give the appropriate paperwork to your insurance provider, such as proof of sale or auto payoff letter.
Some gap insurance companies might also require an odometer verification showing the mileage on your car, which you can get from a dealership before you sell or trade in the vehicle.
Similarly, if you’re refinancing, wait to cancel your gap insurance until your previous loan is no longer in effect.
When You Cannot Get a Gap Insurance Refund
On the other hand, drivers cannot get a gap insurance refund if the insured car is declared a total loss before the policy’s expiration date. In this case, the gap insurance will pay for the difference between the car’s value and the loan balance, but drivers will not be eligible for a refund for the remaining months of coverage.
How Long Does It Take to Get a Gap Insurance Refund?
Gap insurance refunds usually take 4-6 weeks. Staying in contact with your gap insurance provider and promptly returning signed paperwork can expedite the process, though.
Iris Street, Member
my car was a total loss since September 3, 2020 I was told that the Gap insurance company would contact me but I've been patiently waiting since but I haven't heard anything as of yett what should I do?
Keep calling them. Trust me they won't reach out email the most require the documents, but you have to call them directly. In the meantime gather all documents. Request from your insurance company your policy(If you don't have your original, Total Loss Report & Breakdown Letter) Obtain the Police report if you can & File a MV104(DMV) Find your loan Agreement Agreement, Surrender you license plates to DMV(You can walk in and pick up envelopes to surrender them same day, they'll mail you receipt.) Turn over your Tile to the insurance company(If it financed the funds are directed to the Lein Holders) Obtain you Contact the Car Dealer or Warranties associated twith your vehicle cancel all extended Warranties there should be a refund on those used portion of your terms) Those funds will also be applied to your remaining balance of loan. SEND all copies of EVERYTHING ABOVE TO ALL PARTIES, MOST IMPORTANT TO THE GAP INSURANCE and call them to confirm it was received. Call them 2x aweek. Goodluck...My Vehicle was deemed a Total Loss on 4/3/21 I'm finally found out today loan is paid off NO Thanks to Gap INSURANCE, from me they only paid $173 out of 13,576.00 owed. Luckily the depreciated value of my vehicle from the insurance company was a total of 12,553.00. Remainder was mainly paid off by the refund I also received from canceling my extended warranty 1,288.19. Leaving me with a refund of a overpayment. I was told today I will receive that by June 10th 2021 Get all your documents and scan them to email, obtain each party email address and direct # & ext.
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Is it normal to be asked for a tremendous amount of documentation to process my claim. They want bank statements from the bank verifying I paid my car payment monthly. Also all documents from the car dealership showing since the car was used what they purchased it for and any other document they can supply. I don't even understand why they need a copy of my GAP policy and 6 other documents they are requesting after getting the information from my insurance company about payout to the bank.