Claims Process & Documentation Flashcards
7 cards from real GAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Claims Process & Documentation flashcards as text
If a vehicle is stolen and not recovered, which law enforcement document is required as part of the GAP claim submission?
Answer: A police report or stolen vehicle report filed at the time of theft
A police report documenting the theft is required to substantiate the loss event and confirm the vehicle was not voluntarily surrendered.
A GAP claim is filed and the administrator identifies that the primary insurer reduced the ACV due to prior unrepaired damage. How should this affect the GAP calculation?
Answer: The ACV reduction for prior damage may reduce the effective GAP benefit
If the primary insurer reduces ACV for prior unrepaired damage, the effective settlement is lower, which may increase the deficiency—but some GAP agreements exclude deficiencies attributable to pre-existing damage deductions.
What is the standard timeframe a GAP administrator typically targets to process and pay a complete, clean claim once all required documentation is received?
Answer: 3–5 business days
Most GAP administrators aim to process complete claims within 3–5 business days of receiving all required documentation to minimize lienholder interest accrual.
Which of the following would cause a GAP claim to be flagged for potential fraud review?
Answer: The loss occurred within the first 30 days of the loan origination with a high loan-to-value ratio
A total loss claim filed very shortly after loan origination, especially with a high LTV ratio, raises red flags for potential staged loss fraud and triggers additional review.
After the primary insurer pays ACV to the lienholder, the lienholder applies it and calculates a remaining deficiency of $4,100. The GAP product has a maximum benefit cap of $3,000. What happens to the remaining $1,100?
Answer: The borrower remains responsible for the $1,100 deficiency
When the deficiency exceeds the GAP benefit cap, the borrower is responsible for paying the remaining balance that GAP does not cover.
What does the term 'deficiency waiver' mean in the context of a GAP claim outcome?
Answer: The GAP benefit eliminates the remaining loan deficiency, releasing the borrower from that obligation
A deficiency waiver occurs when the GAP benefit payment satisfies the remaining loan balance, effectively waiving the borrower's obligation to pay the deficiency.
Which document must be included in the GAP claim file to prove the original loan terms and the amount financed?
Answer: The retail installment sale contract (RISC) or loan agreement
The retail installment sale contract documents the original loan terms, amount financed, and payment structure, which are essential for validating the GAP claim calculation.