GAP Insurance is a form of insurance coverage tied to your automobile loan and protects you in the case of a total loss. In the case of a total loss, it will effectively reimburse the difference between what your comprehensive auto insurer pays and the outstanding financing amount. GAP insurance is sometimes referred to as Equity Plus, Shortfall Insurance, Total Loss Assist, and Motor Equity Insurance.
GAP or shortfall insurance is frequently charged as a single premium when you take out a car loan. Your dealership or broker might have recommended it.
It is frequently included in your contract, and as a consequence, you will suffer interest charges on top of the premium, making it incredibly expensive and frequently of minimal value.
If your car is written off when your debt is still active, your lender will still expect you to pay off your auto loan balance. Your comprehensive automobile insurance coverage will reimburse you for a specific sum at the time of the loss.
If your insurer’s reimbursement is less than the funded amount owed, there is a gap or deficit. The gap will be filled by GAP insurance or shortfall insurance coverage.
The difference might be substantial because the value of your automobile frequently depreciates quicker than the loan is paid off.
You may not have needed GAP insurance when you bought your automobile, depending on your requirements at the time. For example, it would depend on what your auto insurance policy protected you for.
Furthermore, your GAP or shortfall insurance may only cover a portion of the GAP rather than the whole GAP. You may have been excluded from the policy depending on your level of coverage.
Many new or used automobiles are qualified for GAP coverage; however, GAP can cover more than your car. It may also include:
GAP does not cover the following:
The value of a new automobile depreciates the moment you drive it off the lot. By the end of the first year, that automobile will have lost 20% of its value on average.
In general, auto insurance only covers what a vehicle is assessed to be worth at the time of loss. GAP pays the difference when you owe more on your loan or lease than the vehicle’s assessed value.
To calculate your gap protection refund, check the policy expiration date and the amount you paid for GAP insurance, then divide that amount by the number of months your policy covers. You should calculate your refund by multiplying the monthly amount by the number of months you will not be utilizing the premiums.
For reference, if you pay $900 for 36 months of protection, your monthly payment would be $25. If you decide after 22 months that you no longer want GAP insurance, you can seek reimbursement for the remaining 14 months of coverage. In such a scenario, you will receive a refund of $350.
Are You Eligible to Get Refund?
If you’re not sure if Guaranteed Asset Protection is correct for you, consider the following three questions-
Your comprehensive auto insurance policy may have given adequate coverage. If you have comprehensive auto insurance, GAP insurance will cover you. The gap coverage should not have been sold to you if you do not have comprehensive auto insurance.
However, the selling process may have resulted in the policy being added without your awareness or the policy not being disclosed to you in sufficient detail to make an informed judgment about whether the insurance was worth purchasing.
You certainly can! With the assistance of the eRefunds, you most certainly will. Over the years, we’ve assisted a large number of Australians in recovering lost money from GAP insurance payments.
We will communicate with your insurance company to terminate your coverage and give a refund.
If you decide to cancel your gap insurance policy during the term of coverage, you can request a reimbursement. The insurance may not tell you that you are due a refund and will most likely not repay you automatically. In most situations though with our assistance, you will be repaid the unused portion of your coverage and often get back the premiums which you’ve already paid.
If you have any questions concerning the procedure, please do not hesitate to contact us. Our experienced staff will handle all of the necessary tasks for you and obtain your refund.
eRefunds is Australia’s number one claims management firm. We will assist you in establishing your claim and determining if you are entitled to a refund on a No Win No Fee basis, which means you will not have to pay anything if you are unsuccessful.
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After over a decade’s experience in this space we know how to get you the maximum amount back for minimal effort on your behalf. Just sit back and let us handle the process for you.
Acting on behalf of our customers is an honour and we don’t take this responsibility lightly. We work in a highly regulated environment and are proud holders of an Australian Financial Services Licence (Number 519282).
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