Important: Our firm handles cases where a dealership charged you for a GAP policy but failed to remit the premium to the insurance provider. We do not handle GAP insurance claim denials, coverage disputes with GAP insurance carriers, or disputes over GAP claim amounts. If your GAP claim was denied by the insurance company for reasons unrelated to the dealer failing to fund the policy, we are unable to assist with that type of matter.
Dealer didn’t pay GAP? If a dealership charged you for a GAP policy but never remitted the premium, you may be entitled to recover the full deficiency balance plus attorney’s fees. A consumer protection attorney can help.
What Is G.A.P. Insurance?
G.A.P. stands for Guaranteed Asset Protection. It is an optional insurance product that covers the difference between the amount you owe on a vehicle loan or lease and the vehicle’s actual cash value (ACV) in the event of a total loss due to theft, accident, or other covered event.
For example, if your vehicle is totaled and your insurance pays out $18,000 but you still owe $24,000 on the loan, a GAP policy would cover the remaining $6,000 so you are not stuck paying out of pocket for a car you can no longer drive.
Key Facts About G.A.P. Coverage
Is G.A.P. Required by Lenders?
GAP insurance is typically not required by lenders, but it is often recommended, especially for borrowers financing a large portion of the purchase price or those with longer loan terms. While not mandatory, lenders may offer GAP as an option during financing. Some dealerships may also misrepresent that a GAP policy is required as a condition to obtain financing from a bank, which is a deceptive practice.
Does G.A.P. Require You to Have Auto Insurance?
Yes. GAP insurance typically requires the borrower to have comprehensive and collision coverage on their auto insurance policy. GAP is designed to work in conjunction with your primary auto insurance. If you do not have the necessary coverage at the time of the loss, your GAP claim may be denied.
Can You Cancel a G.A.P. Policy?
Virtually every GAP policy will have a cancellation provision. Consumers should review the terms of their GAP contract for information on how to cancel the policy and whether a pro-rated refund of the premium is available.
What Is G.A.P. Premium Fraud?
GAP premium fraud occurs when a dealership charges a consumer for a GAP policy during the vehicle purchase but the dealer didn’t pay GAP to the insurance provider. The consumer believes they have coverage. They may even have paperwork that says so. But when a total loss event occurs and they file a claim, they discover the policy was never funded and their claim is denied.
This leaves the consumer responsible for the full deficiency balance, often amounting to thousands of dollars, for a vehicle they can no longer drive. Some dealerships do this intentionally to pocket the premium as additional profit, while others do so through negligence or poor internal controls. Either way, the consumer pays the price when the dealer didn’t pay GAP and no coverage exists at the time of the loss.
Important: Our firm handles cases where a dealership charged you for a GAP policy but failed to remit the premium to the insurance provider. We do not handle GAP insurance claim denials, coverage disputes with GAP insurance carriers, or disputes over GAP claim amounts. If your GAP claim was denied by the insurance company for reasons unrelated to the dealer failing to fund the policy, we are unable to assist with that type of matter.
Warning Signs of G.A.P. Premium Fraud:
| ⚠️ Your GAP claim was denied after a total loss even though you paid for coverage |
| ⚠️ The GAP provider has no record of your policy or premium payment |
| ⚠️ You are now being held responsible for a large deficiency balance after a total loss |
| ⚠️ The dealership told you GAP was required for financing but it was not |
| ⚠️ The dealership is giving you the runaround when you ask about the status of your GAP policy |
What Can You Do If the Dealer Didn’t Fund Your GAP Policy?
If a dealership charged you for a GAP policy but failed to remit the premium to the insurance provider, the dealership will likely be responsible to cover the cost of the “gap” between the amount owed on the loan and the vehicle’s actual cash value at the time of the total loss. A consumer is entitled to pursue these damages in court and may be entitled to recover their attorney’s fees from the dealership.
Depending on the circumstances, consumers may also have claims under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) if the dealership’s conduct involved misrepresentation or deceptive practices in connection with the sale of the GAP product.
What You May Be Entitled To:
| ✓ The full deficiency balance that would have been covered by GAP had the premium been funded |
| ✓ Waiver of the deficiency balance by the lender |
| ✓ Damages under FDUTPA for deceptive practices |
| ✓ Recovery of your attorney’s fees and costs from the dealership |
Deficiency Collections & Credit Damage After a Total Loss
When a dealer didn’t pay GAP, the consequences often extend beyond the immediate deficiency balance. Lenders may pursue the consumer for the unpaid balance, send the debt to collections, or file a deficiency lawsuit. Meanwhile, the deficiency and any resulting collection activity can devastate the consumer’s credit report.
If you are being sued for a deficiency or receiving collection calls and letters for a balance that should have been covered by GAP because the dealer didn’t pay GAP to the provider, you may have both a defense to the deficiency action and an affirmative claim against the dealership.
Additionally, if your credit report reflects inaccurate information as a result of the unfunded GAP policy, such as an improperly reported deficiency balance, collection account, or charge-off, you may have claims under the Fair Credit Reporting Act (FCRA) and the Florida Consumer Collection Practices Act (FCCPA).
Important: Our firm handles cases where a dealership charged you for a GAP policy but failed to remit the premium to the insurance provider. We do not handle GAP insurance claim denials, coverage disputes with GAP insurance carriers, or disputes over GAP claim amounts. If your GAP claim was denied by the insurance company for reasons unrelated to the dealer failing to fund the policy, we are unable to assist with that type of matter.
Dealer Didn’t Pay Your GAP Premium?
When a dealer didn’t pay GAP, consumers can be left exposed to thousands in unexpected liability. Whether you need to hold the dealership accountable or fix the credit damage caused by an unfunded policy, we can help.
| GAP FRAUD CLAIM
Sue Your Dealer – A Law Firm |
CREDIT REPORT CLAIM
Sue Your Credit Report |