GAP GAP Product Features & Pricing

Question 1

What does GAP insurance primarily cover in the event of a total loss?

Accepted Answer

The difference between the vehicle's ACV and the outstanding loan balance

Answer

The full replacement cost of a new vehicle

Answer

Only the deductible on the primary auto policy

Answer

Mechanical repairs after an accident

Question 2

Which of the following is typically NOT covered by a standard GAP product?

Accepted Answer

Overdue loan payments carried over into the balance

Answer

The difference between ACV and loan payoff

Answer

The primary insurer's total-loss settlement

Answer

Negative equity rolled from a prior vehicle

Question 3

A dealer-sold GAP product is most commonly structured as a:

Accepted Answer

Single-premium addendum to the finance contract

Answer

Monthly recurring insurance premium

Answer

Separate deductible reimbursement policy

Answer

Manufacturer warranty extension

Question 4

What is the primary pricing driver for GAP products offered through franchised dealerships?

Accepted Answer

The loan-to-value (LTV) ratio of the financed vehicle

Answer

The borrower's credit score

Answer

The vehicle's color and trim level

Answer

The primary insurer's A.M. Best rating

Question 5

Which GAP product feature allows the insured to receive a credit toward a replacement vehicle purchase?

Accepted Answer

Replacement vehicle credit or new-vehicle allowance rider

Answer

Total loss waiver endorsement

Answer

Deductible reimbursement clause

Answer

Diminished value rider

Question 6

A GAP product that also reimburses the borrower's primary insurance deductible (up to $1,000) is known as a:

Accepted Answer

GAP Plus or GAP with deductible reimbursement

Answer

Extended warranty with GAP

Answer

Mechanical breakdown insurance

Answer

Comprehensive loss waiver