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

GAP insurance covers the 'gap' between a vehicle's actual cash value (ACV) paid by the primary insurer and the remaining loan or lease balance.

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

Standard GAP products exclude past-due payments that were rolled into the loan, as these represent pre-existing financial obligations unrelated to the loss event.

Question 3

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

Accepted Answer

Single-premium addendum to the finance contract

Answer

Dealer-sold GAP is typically offered as a single-premium product added to the vehicle finance contract and financed into the loan.

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

LTV ratio is the key pricing driver because a higher LTV means greater potential exposure between the ACV and the outstanding balance.

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

A replacement vehicle credit rider provides an additional benefit—typically $1,000–$1,500—toward the purchase of a replacement vehicle after a total loss.

(GAP) Guaranteed Asset Protection Certified Practice Test

(GAP) Guaranteed Asset Protection Certified Practice Test

GAP GAP Product Features & Pricing