Getting any insurance when purchasing a vehicle is one of the first things you should do. However, in recent years we have witnessed a significant increase in the number of insurance companies, and thus, an increase in the number of insurance rates and conditions. Some of them are useful, some not so much. That is exactly why in this article we are going to be exploring the GAP insurance refund. We are going to tell you what does it mean, how to get it, and is it really worth it. So, if you want to learn more about it, you are at the right place.
Before we get into any details, we need to know what does GAP insurance means. GAP stands for Guaranteed Asset Protection, and it is insurance that helps you cover the gap between your loan balance and the actual cash value of your vehicle. This basically means that if you own such insurance and you are involved in an accident that completely destroyed your car, the insurance company is going to cover a significant amount of its value. In the following section of the article, we are going to show you how you can calculate your GAP insurance refund.
The calculation process is fairly easy and requires some basic steps. First of all, you are going to check your policy expiration date and make sure it is not expired. Next, check how much you have paid for the GAP insurance. After that, you are supposed to divide the amount by the number of months that your insurance policy is going to cover. And the way you calculate the insurance refund is by multiplying the price per month with the number of months you are not going to be using for the premiums. Even though this might sound confusing, let us give you some examples.
If you have paid a $900 insurance rate for a 36-month coverage, the price per month is $25. Consequently, if you decide you are not going to need the GAP insurance after 22 months and you request a refund, 14 months are going to remain out of your premium. The refund cost for this period is going to cost $350, which is going to be the amount your insurance company is going to give back. However, this applies if you have paid for the GAP insurance upfront, and for the whole period of 36 months.
Also, there is a way to get a full refund, however, this usually means you are going to request this no longer than 30 days after you have initially paid for it. Most insurance companies are going to give you back the full amount, but you need to be aware that it is going to cost you some cancelation fees. These fees are minimal and are worth paying if you decide you no longer need the GAP insurance after less than 30 days. After reading this article, you know a lot more about the GAP insurance refund and how to calculate one.
