GAP Client Advisory Services 3

Question 1

When advising a leasing client about GAP coverage, what key distinction should an advisor communicate compared to a financed purchase?

Accepted Answer

Many lease agreements include built-in GAP coverage, but advisors should verify the terms

Answer

Many lease contracts include GAP-like provisions, but the coverage terms vary widely, so advisors must review the specific lease agreement before recommending additional GAP.

Question 2

A client is deciding between a dealer-sold GAP product and a GAP product offered by their credit union. What is a key advisory point?

Accepted Answer

Credit union GAP products typically have lower premiums and may offer refunds on unused portions

Answer

Credit union and lender-sold GAP products often carry lower premiums and pro-rated refund provisions compared to dealer-financed GAP add-ons.

Question 3

Which regulatory requirement is most important for a GAP advisor to communicate to a client at the point of sale?

Accepted Answer

Clients must be informed of the right to cancel GAP coverage and receive a pro-rated refund

Answer

Federal and state consumer protection regulations generally require that clients be informed of their cancellation rights and any applicable refund provisions for GAP coverage.

Question 4

A client asks an advisor what happens to their GAP coverage if they sell their vehicle before the loan is paid off. What is the correct answer?

Accepted Answer

The GAP coverage terminates, and the client may be eligible for a pro-rated refund

Answer

GAP coverage is tied to the specific vehicle and loan; when the vehicle is sold and the loan is paid off, the GAP policy terminates and a refund of the unused premium may be available.

Question 5

What is the advisor's responsibility when a client experiences a total loss and needs to file a GAP claim?

Accepted Answer

The advisor should guide the client to notify their primary insurer first, then initiate the GAP claim process with required documentation

Answer

Advisors should counsel clients to promptly notify their primary insurer to establish the ACV settlement, then coordinate with the GAP administrator using that settlement documentation.

(GAP) Guaranteed Asset Protection Certified Practice Test

(GAP) Guaranteed Asset Protection Certified Practice Test

GAP Client Advisory Services 3