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How does a gap insurance refund work?
I’ve run into some financial luck, and it looks like I might be paying off my car loan early. I’m thinking it’s time to cancel the gap insurance at this point, too. I want to make sure I get a refund, though—how does a gap insurance refund work?
Shannon Fitzgerald · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations on paying your car loan off early—that’s quite the achievement! Follow these steps to get a
gap insurance refund
: - Contact your gap insurance provider to request a cancellation—you may have cancellation terms and timeframes to consider depending on the dealership, lender, or insurer
- Obtain, fill out, and submit the necessary cancellation forms
- Prepare and submit a copy of a verified odometer disclosure statement
- Prepare and submit a copy of the car loan payoff notice (if you cancel after the loan is paid off)
- Receive your refund within a month or two
If you paid in full upfront, you’re typically entitled to a refund of the unused portion of your policy—meaning the coverage months left in your policy. Some companies may have a cancellation fee, but this will usually be about 10% of your remaining premium.
If you were making monthly payments, you won’t get money back for the full months you already paid, but you may get a partial monthly payment back if you cancel early in the month.
Another great way to keep more cash in your wallet is by spending less on your car insurance—
Jerry
can help! The app is free to use and instantly analyzes custom quotes from top insurance companies to track down the lowest rates available to you. The average user ends up saving $887 a year on
car insurance
, so it’s definitely worth a look. View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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