What should I do if my gap insurance provider is refusing to cover my mom's loan?

My mom purchased gap insurance when she bought her new Nissan Altima. She was in a not-at-fault accident that totaled her car. When she went to submit a claim for insurance, they said that her gap insurance never went into effect. How is this possible? Will she still be able to submit a claim?

Answer provided by
Emily Maracle
Answered on Apr 30, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
“If your mother signed a contract with her lender or dealership for gap insurance, then the contract is legally binding.
While it’s extremely upsetting, mistakes happen. It’s important to show documentation that the gap insurance was in her original contact. Any proof that her monthly payments also included the gap coverage will be important to show as well.
Since the gap insurance provider is saying that they weren’t able to put the coverage into effect, you should also ask for the reason in writing. Also ask for any notices they would have sent your mother about the coverage issues.
If you aren’t able to get any additional information from the provider, or if they continue to deny the claim, you may need to reach out to a lawyer or your state’s Department of Insurance and Financial Services.

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