How to Get a GAP Insurance Refund – Ramsey

Think of gap insurance reimbursements like that $20 bill you forgot in your jeans pocket and then found when you were doing laundry. technically, the $20 was yours to begin with, but it still feels like a gift when you find it. right?

Well, gap insurance reimbursements can give you the same feeling. Even though the refund was really your money to begin with and you knew it was coming, it still feels like you’re getting an unexpected gift when it happens.

Reading: How long does it take to receive gap insurance refund

Let’s get you on your way to find out if you’re eligible for a gift (err, gap insurance reimbursement) and how to get one.

• what is gap insurance?
• what is a gap insurance refund?
• How does a gap insurance reimbursement work?
• how to get your money back from your gap insurance provider
• frequently asked questions about differential insurance reimbursement

Before we dive into the details of gap insurance reimbursements, let’s review the basics of what gap insurance is.

Gap insurance pays the difference between the actual cash value (ACV) of your car and the amount you still owe on your lease or loan. So if you got a loan or leased your car (not recommended!) and your car is wrecked or stolen before you have a chance to pay off your loan or lease, gap insurance will cover the difference.

does it make sense? We write more details about how gap insurance works and why you need it here.

True to its name, a gap insurance refund reimburses policyholders for the premium balance that was not used.

So, for example, suppose you bought gap insurance on your car because you borrowed a substantial amount of money to buy the car and you want to keep your emergency fund in case the car is wrecked or stolen.

>

Two and a half years later, you can pay off your car loan sooner than expected. (Bravo!) If you pay your insurance bill annually and not monthly, you can get reimbursed for the gap coverage for that other half-year you already paid for.

Differential insurance reimbursements can get a bit confusing once you start adding conditions. however, there is no need to worry. In the next section, we’ll explain the details of how difference refunds work in any situation.

See also : How To Start Easily Selling Insurance From Home | Nectar

here are some scenarios showing when you can and can’t get a gap insurance refund.

when can you get a differential insurance refund

Let’s start with the good news. There are generally three situations where you might be able to cancel your gap insurance and get a refund:

1. is paying off your loan.

Paying off your car loan and getting rid of that pesky monthly bill (including those silly interest payments) can be a great feeling. Even better? If you pay off your car loan early, you’re eligible for a partial refund for the gap coverage you haven’t used yet. this is the reason why your refund is only partial. You already used up a portion of your gap insurance policy while your loan was still active. therefore, you will only receive a prorated refund for the part you have not yet used.

2. you are switching to a different insurance company.

If you’re not happy with your insurance provider, you can switch to a different company. Once you cancel your policy from your original carrier (make sure you have new auto insurance in force before you cancel the original insurance), you’re eligible for a refund for canceled coverage you didn’t use. insurance within 30 days of the policy start date, you can get a full refund (including gap insurance costs). if you cancel your insurance after 30 days, your refund will be prorated. check with your insurance provider for the details of your policy.

3. you are selling or exchanging your car.

If you sell or trade in a car that you bought gap insurance on, you can get a refund for the amount of coverage you didn’t use. be sure to wait to cancel your insurance until after the car is legally sold or traded in.

here is an example. Let’s say you originally decided to buy a car that costs $30,000 and you borrow $25,000 to buy it. He also purchased a year’s gap insurance to protect himself financially in case the car is destroyed or stolen before he’s had a chance to pay off his $25,000 loan. (clever!)

After three months of coverage, you want to cancel your gap insurance. it could be due to any of the reasons listed above (loan cancellation, changing insurance company, or if you are selling/trading your car). You’ll get a refund for the nine months of the year that you didn’t use your gap insurance coverage. good!

A quick note about loan payoff refunds: Once you show your gap insurance provider your loan payoff notice, you’ll receive a partial refund for unused gap coverage. Depending on the reason you canceled your gap insurance, wait until the car legally no longer belongs to you or until your original loan is officially no longer in force.

when you can’t get a differential insurance refund

See also : How does Disability Insurance Work | Guardian

good news again. There is only one situation where you cannot get gap insurance reimbursement. well two, if you count not having gap insurance in the first place.

but let’s talk about what counts. If your insured car is declared a total loss and your gap policy pays the difference between the value of the car and your loan balance, you will not be eligible for a refund for the remaining months of coverage. This is because the insurance provider calculates that it has met (or exceeded) its obligation for the gap coverage it purchased and is no longer responsible for policy payments.

Now that we’ve gone over the gap rebate requirements, it’s time to talk about how to get one.

considerations to cancel your gap insurance

Before we get into the basics of requesting a gap refund, there are a few things to think about that could influence your decision one way or another:

• You will only be reimbursed for unused gap insurance. For example, if you cancel your policy after three months of coverage, you will only get a refund for the remaining nine months (if you paid for one year of coverage).
• The amount of your reimbursement is based on how you pay your insurance bill. if you pay monthly, you won’t get a refund because you only paid for the coverage you received so far. If you pay for your insurance in a lump sum, the amount of your refund will depend on how far out of your coverage you were when you canceled your policy.
• once you cancel your policy and request a refund, it usually takes four to six weeks to receive the money.
• you have to ask for a difference insurance refund. most insurance companies don’t offer them automatically.

instructions for canceling your gap insurance policy

Now for the step-by-step instructions. The steps below assume you purchased your gap insurance from your insurance provider and not the car dealer. (hint: it’s much cheaper to get it from your insurance provider).

1. Begin the reimbursement process by contacting your insurance provider. tell them your name, policy number, and that you want to cancel your gap insurance and get a refund for the remaining coverage. Remember, don’t do this until after your car is legally sold or traded in or your loan is officially paid off.
2. Gather and submit documents to your insurance provider showing that your car was traded in, sold, or paid off early.
3. Complete and submit all forms required by your insurance provider to complete the cancellation process.
4. If it doesn’t seem clear, reiterate to your provider that you want a refund for unused gap insurance coverage. most insurance provider reimbursements are sent to you in the form of a check within four to six weeks of your cancellation request.

There are also some unique questions that we don’t cover in this article. we collect answers to those questions here.

1. can i get a refund if i never used the gap coverage?

not. you can’t get a refund simply because you never filed a gap insurance claim.

2. can i file a claim for gap insurance reimbursement?

yes, but before you start haggling with the financial institution that gave you the loan (they have nothing to do with your gap insurance), contact your insurance company. the insurance company can provide reimbursement without having to file a lawsuit. Be sure to keep all records of phone calls, as well as written and email correspondence.

3. Can I get a differential insurance refund if my car loan is refinanced?

If you refinance smartly and opt for a shorter loan term (and hopefully a lower interest rate), you’ll pay off your car faster. therefore, you may no longer need gap insurance, or you may be able to get rid of it sooner than you would have if you didn’t refinance. check your loan documents to see if differential insurance is still required. if you no longer need it, we recommend that you contact your insurance agent for assistance in obtaining a refund for the unused premium.

work with a professional to get your differential insurance reimbursed

When it comes to putting extra money in your pocket with gap insurance reimbursement, the best way to cut through the red tape is to work with an experienced insurance professional.

Our Local Endorsed Providers (ELPS) are unbiased auto insurance experts and will be able to direct you to the smartest and fastest way to get your differential insurance reimbursed.

Connect with one of our trusted elps today!

Source: https://amajon.asia
Category: Other