Gap insurance can be costly, leading some drivers to seek ways to opt-out. Luckily, this process typically doesn’t prove challenging or time-consuming.
Gap insurance policies often allow consumers to receive a refund by cancelling prior to legally selling or trading off their vehicle or paying off loans. To cancel, certain documents will need to be provided as evidence.
Check the Policy
Some dealers provide gap insurance as part of the loan or lease agreement, making cancellation difficult. Check all documentation you received from both dealerships and lenders to see if gap insurance was included and, if it is, request to have it cancelled as soon as possible.
GAP insurance may not be necessary for every driver, and many don’t realize they possess it until trying to cancel it. Luckily, most insurers offer refunds for months of gap coverage that were unneeded; but before getting it you must first contact either the dealership or insurance provider and follow their steps for cancellation of your policy.
If you are canceling because you are selling or trading your car, wait until after its completion before contacting the insurance company. They may require proof that it was sold/traded as well as documents verifying its ownership and low mileage – in many cases your dealer can help facilitate this process by sending these items directly to them for you.
To cancel a gap insurance policy from an independent provider, submit the same information. When all documents have been received by them, they can process your request and send any payments that remain outstanding back directly.
Cancelling gap coverage might seem like a hassle, but it could save you a significant sum in the long run. To prevent unnecessary expenditure on this coverage, keep an eye on both the value and loan balance of your vehicle and cancel when no longer required.
Place an additional down payment on your vehicle purchase to reduce gap insurance requirements by quickly paying off the difference between its value and loan amount. Therefore, before purchasing any car consider checking Kelley Blue Book values against its asking price to help make an informed decision.
Contact the Lender
GAP insurance can help cover the difference between what you owe on a loan or lease agreement and its current market value if your car is totaled or stolen, but some drivers no longer require its protection – in which case, cancelling before your loan is paid off or traded could yield you a rebate on its premiums.
To cancel a gap policy, it’s necessary to contact your lender and gain their permission. Your loan or lease contract may stipulate that gap coverage be maintained until paid off – make sure all paperwork has been reviewed carefully with them before cancelling it! Also be sure to obtain an estimate of both the value of your car and estimated remaining loan balance so that all necessary data are available when canceling gap insurance policies.
Your lender must verify your car’s value and the remaining loan balance before they approve cancelling your gap insurance policy. A car appraisal from either a dealership or independent sources like Kelley Blue Book or Edmunds should be presented. In addition, proof that you’re selling or trading is also needed, along with a copy of your payoff letter showing details on any outstanding gap insurance balances.
Once the lender has verified your information, you can make arrangements to cancel your gap coverage via an insurance provider approved by them. Keep in mind that the cancellation process can take four to six weeks and it is best to remain in contact with your insurer to ensure your refund is processed on time. Make sure that the insurer has your current address on file so they can send your refund check directly. If you are switching car insurers, it is essential that they know your gap insurance is being cancelled in order to update the mileage on your car and avoid coverage gaps. Speak with your new agent regarding specifics on how and when to cancel it as well as when they must complete new mileage verification procedures.
Contact the Insurance Company
GAP insurance can be cancelled at any time, though the process varies depending on your insurer and how it was purchased. You should typically be eligible to receive a refund from either your lender or dealership that sold you the policy, though you could potentially contact the company directly and cancel. As soon as your policy arrives in the mail, review it thoroughly for cancellation fees or an explanation of coverage gaps; in addition, see if your dealer provides an odometer disclosure statement (ODS).
Typically, cancelling gap insurance within its cooling-off period – typically 30 days or less after purchase – should allow for full reimbursement. It is essential that you carefully read over your specific policy as there may be terms and conditions you must fulfill to claim back your refund.
Most consumers purchase gap insurance through three main outlets: car dealerships, lenders and credit unions or banks. Each of these providers may offer monthly payment plans or one lump sum option – it is important to ask about transaction fees prior to signing any contracts!
As soon as you have reviewed and confirmed that you qualify for a refund, it is a wise idea to contact the insurer directly in order to cancel it. Doing this can speed up the process as your request won’t get lost in a sea of paperwork; additionally, follow-up should occur periodically until your refund arrives in full.
If you’re still unsure whether you need gap insurance, remember that it could be an unnecessary waste of money that detracts from your driving experience. Gap insurance serves to cover the gap between vehicle value and loan balance in case it is declared total loss; with proper research and careful budgeting it should be possible to find coverage that provides what benefits are necessary while staying within your budget.
Get Your Mileage Verified
GAP insurance covers the difference between your car’s actual value and what you still owe on it, so once it reaches its break-even point you may no longer require gap insurance.
To do this, it’s essential that the dealership or insurer have accurate vehicle mileage. This is usually accomplished using an odometer disclosure statement from your dealer; to get this document early and avoid potential surprises later on it might also help if you take your vehicle for a drive or visit a mechanic before getting an odometer disclosure statement form as information may change overtime.
Before approaching an insurance company, lender, or dealership to cancel gap insurance, ensure you have all of the appropriate paperwork and forms ready. They will explain their specific process as well as when and how long it might take for you to receive a refund for canceling coverage – plus answer any queries regarding it!
Sometimes it may be possible to cancel gap insurance directly through an insurance company instead of dealing with dealership or lender directly, making the process faster and simpler compared to dealing with dealership or lender directly. You can either cancel online or by phone; just be sure that any applicable clauses specify whether gap insurance is part of your financing agreement before cancelling coverage if applicable as there may be penalties attached when doing so.
If you are selling or trading in your vehicle, wait to cancel its gap insurance until after its sale has completed – otherwise it could lead to issues if you need to make a claim and didn’t cancel in time.
Cancelling gap insurance may seem complicated, but the process usually goes more smoothly than you expect. By following these steps you should receive your refund within an acceptable amount of time and avoid any extra charges or fees. If you need assistance or don’t know what steps to take BrokerLink has experts who are happy to provide advice regarding cancelling gap insurance policies in your local area who can answer all your queries about how best to handle it.
