General Asset Protection (GAP) insurance can help protect you from the risk of an outstanding balance on a loan for a car you no longer have due to it being totaled in an accident or stolen. This outstanding balance is often referred to as a deficiency balance and it is not something anyone wants to be stuck with.
But, what if your GAP insurance no longer applies because you’ve paid off a good portion of your loan balance already? Or, what if you sold your Chrysler? or traded it in for a different vehicle?
You may be entitled to a refund or credit if you already paid for months of gap insurance coverage that you no longer need. On the other hand, if you are in the market for GAP insurance right now, find out the refund policy before signing up so you don’t end up paying for something you may not need down the road.
Depending on how the car was purchased, you’re either paying for GAP insurance as an add-on or it came “free” with the car as a “Payoff Protector” rider. If your GAP insurance policy allows you to cancel, you should be able to do so by contacting the same dealership that originally sold you the policy.
Does Chrysler have its own GAP insurance?
According to Sherry, a phone representative for CNA National Warranty Corporation, CNA is one of the “first on the block” to offer GAP insurance for Chrysler vehicles and has been around for more than 35 years.
She also confirmed that while car buyers (and car leasers) can purchase GAP insurance at independent dealerships when you buy a Chrysler, CNA is one of the more popular options. (Chrysler doesn’t have its own in-house GAP policy.)
How can I cancel my Chrysler Capital GAP Insurance?
If you’re leasing a car through Chrysler Capital, you cannot cancel your GAP insurance because it’s included as a part of your lease agreement.
If you bought your car from a Chrysler dealership and you want to cancel your GAP coverage, you need to check your loan agreement to see what the cancellation policy is for the product you purchased.
To cancel your Chrysler GAP coverage, contact your Chrysler dealership directly to inform them of your request to cancel your GAP policy. You’ll want to put your request in writing, and you should also ask for a written confirmation of your policy cancellation.
Alternatively, if you purchased a CNA National Warranty GAP policy through Chrysler, you may be able to cancel it by sending a letter by mail, email, or fax.
Hard copies of cancellation letters should be sent to:
CNA National Warranty Corporation
Attn: Cancellations Dept.
P.O. Box 2480
Scottsdale, AZ 85252
Cancellations sent by email should be directed to cancellations@cnanational.com. Faxed cancellation letters should be sent to 888-694-4166.
If necessary, you can also contact your Chrysler dealership by phone or call CNA National Warranty directly at 800-345-0191 for more information.
FAQs
What is gap insurance?
Gap insurance is the difference between the car’s current value (from sites such as Kelley Blue Book) versus the amount already paid for a car. This type of insurance is used after a car has been wrecked or stolen and deemed a total loss.
When would you need gap insurance?
If you put down less than 20% on your new Chrysler, have a lengthy repayment plan (five years or more), leased the vehicle, or bought a car known to depreciate quickly, GAP insurance is recommended. Chryslers are estimated to depreciate between 35% and 50% over five years.
Unfortunately, Chrysler’s depreciation rate is higher than other cars, considering most lose 20% of their value within a year. So it may not be in your best interest to cancel gap insurance.
What’s the difference between standard auto insurance and GAP insurance?
Standard auto insurance policies cover the cost to repair or replace your car at the current market value at the time of a claim; GAP insurance covers the difference between the current market value and the amount left on your auto loan.
How do you buy GAP insurance?
Auto dealers and car insurers can offer GAP insurance, but the same coverage may be available at an insurance company for a lower price. GAP insurance usually costs a minimum of around of $20 – $50 annually, in addition to the cost of your regular car insurance.
Should I cancel GAP insurance on a high-mileage car?
A high-mileage car doesn’t necessarily mean a low-value car. It’s possible that there are new parts in your high-mileage Chrysler, which increase its value. However, GAP insurance only covers factory-installed equipment.
If you’ve been approved for an auto loan for a high-mileage Chrysler car but stripped out many of the original parts, it may be a good time to cancel GAP insurance. Additionally, regardless of the mileage, you only need to get this type of coverage if the amount owed is higher than the car’s value. With high-mileage cars, that scenario is usually rare.
Can gap insurance be used for cars bought outright?
To qualify for GAP insurance, cars must be leased or purchased with an auto loan. If you own a car outright, you cannot purchase GAP insurance, nor do you need it.
Does GAP insurance pay my standard insurance deductible?
Unless the GAP contract specifies it will pay for your insurance deductible, it won’t be covered under your GAP policy. If your car’s value or the loan balance are less than the deductible, GAP insurance is unnecessary.
What can void my GAP insurance coverage?
While gap insurance is not voided out if you are late on car payments, it won’t cover overdue amounts or payment holidays. Because one factor of gap insurance is the amount already paid on the car, the overdue funds make the loan balance higher than it would’ve been before the accident.
Extended warranties, carryover loans, excessive-use penalties, towing, storage, and security deposits are also not covered.
The Wrap Up
With all the variables involved in both buying GAP insurance and canceling GAP insurance, this decision largely comes down to your finances and the value of the car. Unless there is a disclaimer requiring gap insurance for the life of the car (common in leased vehicles), you may just want to keep an eye on the condition of the car, the auto loan balance, and reevaluate GAP insurance each year.
If you decide it’s time to cancel your Chrysler’s GAP coverage, you should be able to do so relatively easily by following the cancellation instructions on your contract or by contacting the dealer or insurance provider. However you decide to initiate the cancellation process, you’ll probably have to write a letter to the dealership or administrator with a formal request to terminate your coverage.
Sources:
- Cancellation Request. (n.d.) CNA National.
- Nasdaq. (2012, February 24). Does a late car payment void my gap policy?
- Kelley Blue Book. (n.d.). My car’s value.
- E. Schad. (2022, November 21). How much is Chrysler depreciation? Jerry.
- Insurance Information Institute. (n.d.) What is gap insurance?
- R. Looker. (2022, June 14). How cancellations are processed for ancillary products. Chrysler Capital.
Shamontiel L. Vaughn has been in the publishing industry for 17 years as a newspaper reporter, a web editor, social media specialist and a print editor. Her areas of expertise include K-12 and adult education textbooks; local and nationwide news; and health news. She’s also completed approximately 235 interviews in a variety of areas, including business management; entertainment; internet technology; law (entertainment, business and real estate); nursing; and travel. Some of her bylines can be found in the Chicago Defender, Chicago Tribune and CBS Chicago.
