What is Guaranteed Auto Protection (GAP)?
In the event your vehicle is totaled or stolen, your primary insurance company settlement can be significantly less than the outstanding loan or lease balance. This may create a deficiency balance or a “gap” resulting in a serious financial hardship for you. Not only do you need to finance a loan for a replacement vehicle but you would have to pay off the deficiency on your current loan. GAP covers the loan balance that your primary insurance carrier did not cover.
What are the benefits of GAP?
• Low-cost protection
• Protection is provided for the term of the loan (up to 84 months)
• Covers primary insurance deductible up to $1,000
• No mileage or year restrictions
• Eliminates the out-of-pocket expense for the remaining loan balance after loss settlement
• Helps you avoid financial hardship and afford a replacement vehicle
• Prevents deficiency balance from being added to new loan
• Helps protect your credit rating
What vehicles are eligible for GAP?
New and used autos, vans, SUV’s and light trucks, up to 1 ton load capacity. New and used motorcycles up to $30,000 in value.
Can I buy GAP on a salvage/reconstructed titled vehicle?
No. Salvage or reconstructed title vehicles are not eligible for GAP.
I have an older car, is there an age limit on my vehicle?
As long as a value for the vehicle can be found in the regular NADA publication, it is eligible for GAP.
I will be using my vehicle for my business, can I buy GAP?
If the vehicle is titled under an individual, not a business name, it is eligible for GAP.
Can I buy this same type of coverage through my dealer?
Yes you can! But you will find GAP rates sold through dealerships are generally much higher.
Does GAP replace my comprehensive and collision coverage?
No, GAP is not a substitute for collision or property damage insurance.
How do I pay for the GAP coverage?
Normally, GAP is financed in with your loan. You may be able to pay the full GAP fee up front in one payment.
Will I receive something in the mail after I purchase GAP explaining the coverage?
No, the GAP coverage is defined in the GAP Waiver Addendum given to you at time of purchase.
Can I purchase GAP after loan origination?
Yes, you can purchase GAP up to 18 months after loan origination.
How is my deductible covered by GAP?
The primary insurance deductible is covered as part of your unpaid loan balance; it is not “reimbursed”. GAP covers the difference between the actual cash value (ACV) of your vehicle and the outstanding loan balance. Since your insurance company pays ACV less the amount of your deductible, the “gap” is increased by this amount. When your loan balance is paid off by GAP the deductible is paid as part of that balance.
If my primary insurance pays off my loan balance in full does GAP reimburse me for my deductible?
No, see “How is my deductible covered” question above. You did not actually pay for the deductible, so GAP does not pay the deductible back to you.
Can I purchase my salvage (totaled vehicle) back from my insurance company?
If you purchase your salvage from your insurance company, they will deduct this amount from what they pay. The amount of this deduction will not be covered by GAP.
Does GAP cover towing and storage expenses?
No, it does not cover towing and storage expenses.
If I am past due on my loan, how does this affect the GAP settlement?
GAP will cover past due payments up to 30 days, if you are past due more than that, the past due payments will be deducted from the GAP settlement. This includes skipped payments as part of a lender skip a pay program. GAP does not cover any late charges.
How do I file a claim?
Contact your ICFCU branch to file a GAP claim. They will need a copy of your primary insurance company’s settlement worksheet and a copy of the police report. The GAP claim payment is paid back through ICFCU and applied to your loan.
Is there a deadline to file a GAP claim?
GAP claims must be filed within 60 days from the date of your primary carrier’s settlement.
How do I receive payment for the GAP claim?
The GAP claim settlement is paid to ICFCU and applied to your loan.
I have a service warranty policy on my vehicle – does this affect the GAP claim?
GAP does not cover the refundable portion of any service warranty or full term credit life insurance since you can obtain this reimbursement back by canceling the policies with the appropriate companies.
What is the maximum amount GAP will pay?
Maximum GAP loss covered is $50,000.
Does GAP pay if I am uninsured?
If there is no primary insurance, GAP pays the difference between the NADA Retail Value of your vehicle, at the time of loss, and the outstanding balance of you loan. Most likely GAP would not pay off the loan balance in full in this situation.
I am refinancing my loan. Can I purchase GAP at that time?
Yes, the GAP would cover the new loan term and balance.
I have GAP and am going to refinance my loan – Does the GAP transfer to the new loan?
GAP could transfer to the refinanced loan. However, if any money is added to the loan or the term extended when the loan is refinanced, GAP will not cover these changes. The GAP you purchased is an Addendum to the loan contract on which it was sold. Any changes to the original loan terms can affect the GAP coverage.
Can GAP be transferred to a different vehicle?
No, it cannot be transferred to a different vehicle.
I am refinancing my loan at another financial institution – can the GAP transfer to my new loan?
No, the GAP is nontransferable.
I am going to have additional funds added to my loan – do I need to purchase a new GAP enrollment?
Yes. Any additions or modifications to your loan will not be covered unless you purchase a new GAP enrollment. The GAP you originally purchased is an addendum to the loan on which it was sold so any monies added to the loan would not be covered.
My car has been totaled. Should I continue to make payments on my loan?
Yes, continue to make your loan payments and notify a Pentagon Federal Credit Union representative of the total loss as soon as possible.
Can I cancel my GAP?
Your GAP coverage may be cancelled anytime in the first 60 days for a full refund. After 60 days the coverage is non-refundable. For cancellation, call us at 765-284-1015.