How to File a Gap Insurance Claim After a Total Loss

Guaranteed Asset Protection (GAP) insurance serves a specific financial purpose for individuals who finance or lease a vehicle. This optional coverage helps address the potential financial gap that arises when a vehicle is declared a total loss or is stolen and the outstanding loan or lease balance exceeds the vehicle’s actual cash value (ACV) at the time of the incident. When a car loses value rapidly due to depreciation, which often begins the moment it is driven off the lot, standard auto insurance might not cover the entire loan balance, leaving the owner responsible for the difference. GAP insurance is designed to cover this remaining amount, protecting the vehicle owner from significant out-of-pocket expenses for a car they no longer possess.

Initiating Your Claim

After experiencing a total loss event or unrecovered theft, the initial step involves contacting your primary auto insurance carrier to report the incident. This is crucial because your GAP insurance claim cannot proceed until your primary insurer has assessed the damage, declared the vehicle a total loss, and determined its actual cash value. Your primary insurance company will then issue a settlement amount based on the vehicle’s ACV, which is typically less than the remaining loan balance due to depreciation.

Following the primary insurance settlement, you should contact your GAP insurance provider to initiate their claim. This provider might be the lender, a third-party company, or your auto insurer, depending on where you purchased the policy. When making these initial calls, have important information readily available, such as your policy numbers, the date and circumstances of the incident, and detailed vehicle information like the Vehicle Identification Number (VIN).

Compiling Necessary Documents

Filing a GAP insurance claim requires specific documents.

Here are the documents you will need:
A letter from your primary insurer confirming the total loss and detailing the actual cash value settlement, often including a copy of the settlement check paid to your lienholder.
A copy of the police report if the total loss was due to theft or an accident requiring law enforcement involvement.
The original loan or lease contract, outlining the financing terms, the original amount financed, and the annual percentage rate (APR).
A complete loan history or payment ledger from your lender, showing all payments made and the current outstanding balance.
A copy of your GAP insurance policy or contract.
The vehicle’s title or registration.
A buyer’s order or sales agreement.
A vehicle valuation report from your primary insurer detailing how the ACV was determined.

It is important to obtain these documents directly from their respective sources, such as your primary insurer, lender, or the dealership, to ensure accuracy and completeness for your GAP claim.

Submitting and Following Up on Your Claim

Once all necessary documents have been gathered, submit your complete claim package to your GAP insurance provider. Submission methods can vary, often including online portals, email, mail, or fax; so follow your provider’s specific instructions. Ensure all required forms are filled out accurately and completely before submission to prevent delays. After submitting your claim, you should receive a confirmation, often including a claim number, useful for tracking its status.

An insurance adjuster may be assigned to review your claim, verify the documentation, and confirm the remaining balance with your lender. The processing time for GAP claims can range from a few weeks to several weeks, typically between 30 to 45 days, depending on the complexity of the claim and the provider. Continue making your regular loan or lease payments during this period to avoid any negative impact on your credit, as your obligation to the lender remains until the claim is settled. If your claim is approved, the GAP benefit is usually paid directly to your lender or lessor to cover the remaining balance on your vehicle.