Do you get a refund for gap insurance?

You can usually receive a gap insurance refund if you pay off your loan early or trade in your vehicle. Your refund depends on the value of the car, the loan amount, the car's mileage, and your loan repayment period. Gap insurance refunds are usually issued within several weeks.

How much will my gap insurance refund be?

To determine your due GAP refund, you have to check the policy expiration date and how much you paid for the GAP insurance, then divide that amount by the number of months your policy covers. You should calculate your due refund by multiplying the price per-month by the number of months you won't be using the premiums.

What happens if you don’t use gap insurance?

If you don't have gap insurance, you would have to pay $1,000 out of your own pocket to settle your auto loan on the totaled car. If you have gap insurance, your insurer would help pay the $1,000.

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How much do you usually get back on gap insurance?

$15,000 minus 20% ($3,000) is $12,000, or the estimated actual cash value of the car after a year's time. If you still owe more than $12,000, you're on the hook for anything above that amount. But if you have gap insurance, the coverage can help pay off what's left on your loan.

What are the benefits of having gap insurance?

Gap insurance—also known as guaranteed auto protection—reimburses a car owner when the payment for a total loss is less than the outstanding loan or lease balance. Gap insurance makes the most sense for people who put no money down and choose a long payoff period.

Is it worth it to get gap insurance?

If there is any time during which you owe more on your car than it is currently worth, gap insurance can definitely be worth the money. If you put down less than 20% on a car, you're wise to get gap insurance at least for the first couple of years you own it. By then, you should owe less on the car than it is worth.

What is the most gap insurance will pay?

Gap insurance will pay the difference between the amount you still owe on a vehicle and actual cash value (ACV) paid out by your car insurance company. Lease/loan coverage typically has limitations on how much it will payout, such as 25% over the determined ACV of your vehicle. Both are minus your deductible.

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What does gap insurance actually cover?

Gap insurance is an optional car insurance coverage that helps pay off your auto loan if your car is totaled or stolen and you owe more than the car's depreciated value.

Is gap insurance automatically refunded?

Once you cancel your policy and request a refund, it typically takes between four and six weeks to receive the money. You have to ask for a GAP insurance refund. Most insurance companies don't automatically offer them.

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How long does it take for 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.

How much can a gap refund be?

If you decide that you no longer need GAP insurance after 22 months, you can request a refund for the remaining 14 months of coverage. In that case, your refund will be $350. Note that this applies only in case you paid the full GAP insurance amount upfront.

How is gap insurance payout calculated?

Gap insurance will pay the difference between the amount you still owe on a vehicle and actual cash value (ACV) paid out by your car insurance company. Lease/loan coverage typically has limitations on how much it will payout, such as 25% over the determined ACV of your vehicle. Both are minus your deductible.

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Do you get money back on gap insurance?

You can usually receive a gap insurance refund if you pay off your loan early or trade in your vehicle. Your refund depends on the value of the car, the loan amount, the car's mileage, and your loan repayment period. Gap insurance refunds are usually issued within several weeks.

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