Do you know that amazing feeling when you’re digging through your jacket pockets just to find some long-forgotten money? It’s still your money and you didn’t actually earn anything, but it feels like a gift, right? That’s a little bit like what a GAP insurance refund feels like. You purchased insurance, were paying for it, you’re expecting it to be refunded but you still love the little reward of your money coming back to you. In today’s economic situation, most of us can’t spare even a single penny, so let’s learn all about GAP insurance and how to get refund money into your pockets.
What is GAP insurance?
Before we dive into the refund mess, it’s important to know what exactly is GAP insurance. GAP insurance or more precisely, Guaranteed Auto (or Asset) Protection is coverage for vehicles, both new and leased. In case your vehicle gets damaged, totaled, or stolen, your GAP insurance can provide you with a safety net and help you pay the difference between your car’s current value and the money you owe to your lender.
The issue is that cars lose value as soon as you take them out of the salon, and continue to depreciate, dropping 20% in value by the end of its first year. During its second year, it will lose another 15% and so on and so on. Now comes the worst part: if your vehicle gets stolen or destroyed, the insurance will only cover the actual cash value of your car, minus the depreciation. Let’s say your $15,000 car gets stolen after one year—you’ll most likely get around $12,000 from your insurance company because of the drop in value. And if you owe more than $12,000 to your lender, you have to cover it yourself, unless you have GAP insurance that will cover everything that’s left.
What is a GAP insurance refund?
It’s all in the name this time. GAP insurance refund will give you your money back for the unused premium balance. It sounds quite complicated, but it’s quite simple actually. If you borrow some money to buy a car and you want to save money on any emergencies that might happen in the future (car crash or car theft), you can buy GAP insurance. In just a little bit over two years, you’ve managed to pay off your car loan even before its due date. In case you decide to be billed for your GAP insurance annually, it’s possible to get your money back for the remainder of the year you paid in advance.
Am I eligible for a refund?
It’s possible to get your refund in different cases. Typically, there are three situations that allow you to finish paying for GAP insurance and get your money back: you’re paying off your loan, you’re changing insurance companies and you’re selling your car. In the first situation, you can get a refund for GAP coverage you’ve paid for but haven’t used. Next, if you want to change your insurance provider for any reason and switch to a different company, it’s possible to cancel your policy. Then, you can get a refund on the paid part of the coverage that you haven’t used yet (just make sure to get new car insurance before you cancel your old one). And lastly, if you decide to sell or trade your car with GAP insurance, you can also receive a refund on unused coverage. This all might sound confusing, so if you’re new to insurance refund, it might be best to contact professionals who can check whether you’re eligible for a GAP insurance refund and do all your paperwork. If you find the right company, you can only pay them for their services in case you get your refund which means more money in your pocket!
Where’s the scam?
Your GAP insurance only works in case you have comprehensive car insurance (which is already very useful and provides good safety). In case you don’t have comprehensive car insurance, you should not have been sold any GAP insurance policies. In some cases, agents can slip in the GAP insurance policy without your knowledge or push you to buy it without proper explanation. This is an obvious insurance scam and you might benefit from talking to your chosen claims management company.
All in all, you’ll love your GAP insurance refund when you manage to get it. You and your insurance expert team can work together and get you your precious money back!