GAP Coverage Terms & Conditions 2

Question 1

What is the typical maximum benefit cap on a GAP waiver agreement?

Accepted Answer

$2,500

Answer

Most GAP waivers cap the benefit at $2,500 to $5,000 above the primary insurer's settlement, though $2,500 is the most common standard cap.

Question 2

Which event would most commonly trigger a GAP claim payout?

Accepted Answer

Total loss declaration by the primary auto insurer

Answer

GAP coverage is triggered when the primary insurer declares the vehicle a total loss, leaving a balance between ACV and the loan payoff.

Question 3

How does a deductible assistance provision within a GAP product benefit the customer?

Accepted Answer

It covers the customer's primary insurance deductible up to a specified amount

Answer

Deductible assistance covers the customer's out-of-pocket deductible on the primary claim, reducing their financial burden at total loss.

Question 4

Under most GAP agreements, what happens if the customer is more than 90 days delinquent on their loan at the time of loss?

Accepted Answer

The benefit is reduced by the amount of past-due payments

Answer

Most GAP contracts reduce the benefit by the amount of loan payments that are overdue at the time of loss.

Question 5

Which term describes the vehicle's market value used by the primary insurer to settle a total loss claim?

Accepted Answer

Actual Cash Value (ACV)

Answer

Actual Cash Value (ACV) is the depreciated market value the primary insurer pays on a total loss, which is often less than the outstanding loan balance.

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GAP Coverage Terms & Conditions 2