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Guaranteed Auto Protection (GAP)

Coverage Description:

 In the event of a total loss due to physical damage or unrecovered theft, GAPcovers the difference between the actual cash value of the automobile (primary insurance settlement) and the outstanding loan balance at the time of loss.  The primary insurance deductible is covered up to $1,000.

 

Marketing:

 GAP is offered to borrowers as an additional service and the purchase is voluntary.

 

Cost:

 Lender cost is a flat fee per loan regardless of loan amount, loan term or collateral value.  The lender establishes the price paid by borrowers.

 

Compensation:

 The lender is permitted to mark-up the cost of GAP to earn fee income.

 

Underwriter:

 The lender’s GAP policy will be underwritten by an “A” (Excellent) rated insurance company.  This rating is assigned by the A. M. Best Company.

 

Benefits to Lender:

 * Protection against uncollectible loan balances
* Increased satisfaction for borrowers
* Fee Income

 

Limit of Liability:

 The maximum GAP claim payable is $50,000, including the primary deductible up to $1,000.

 

Maximum term:

 84 months on auto, trucks and motorcycles.
120 months on watercraft, motor homes and travel trailers.

 

Maximum loan-to-value:

 150% of MSRP or 150% of NADA retail value on autos, trucks & vans.
125% of MSRP or 125% of NADA retail value – all other collateral

 

Eligible Collateral:

 Private passenger automobiles, vans, pickup trucks (not exceeding one ton capacity), motorcycles, ATVs, watercraft, motor homes and travel trailers.