How does gap insurance work if I refinance my loan?
I just refinanced my loan and had previously purchased gap insurance. I don't need it anymore and I'm wondering if I can get a refund for it.
Answer provided by
Answered on Apr 30, 2021
“Once you refinance your loan, you typically won’t need gap insurance.
Gap insurance is recommended when the amount you owe on your loan exceeds the fair market value of your vehicle. Refinancing typically lowers your loan amount, meaning gap insurance isn’t required.
You should reach out to whoever provided the gap insurance to inquire about a refund. Most lenders charge a fee upfront for gap insurance, but if there is any unused premium, you could be refunded it. “
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Browse by topics
What others are asking
How will California’s proposed ban on sales of new gasoline cars affect car insurance rates?
I heard on the radio that California might ban gas-powered cars in the next 15 years. I own a car in California. What is that going to mean for my auto insurance rates?
Mar 12, 2021
Can I get a refund for my unused gap insurance after my car was totaled?
My car was totaled and the insurance paid off my loan. My lender said that they were going to reach out to get me a refund for the extended warranty and gap insurance. It looks like I will be getting a refund for the warranty, but I'm still not sure about the gap insurance. Should I contact the company?
May 03, 2021
"How can I get rental car liability insurance for an eight-week road trip? "
I don’t own a car and don’t have any car insurance. I will use my credit card for collision coverage, but what about liability coverage? Is it cheaper to use the rental agency’s liability coverage or a third-party insurance company?
May 06, 2021