How does gap insurance work if your car is stolen?

Asked by: Carey Raynor  |  Last update: March 18, 2025
Score: 4.1/5 (24 votes)

You woke up and had a car, and next thing you know, it was gone. But does that mean your gap insurance will still work the same? It does! If your car is stolen and unrecovered, gap insurance will still pay the difference between your car's actual cash value and the amount owed for it.

Why would a gap claim be denied?

If the gap insurance company discovers there was any fraud or misrepresentation (you lied) on your application for coverage, your claim could be denied. The vehicle isn't a total loss. Only total loss claims are covered by a gap policy. The claim exceeds the policy limits.

What happens with insurance when your car is stolen?

Yes, if you have comprehensive coverage on your policy, auto insurance can help pay for your stolen vehicle if you don't recover it. Depending on your policy, you may also have coverage for custom parts, paint, rims, and other aftermarket additions.

What does GAP insurance actually cover?

Gap insurance helps pay the difference between what's owed on a vehicle loan and the actual value of it, if it's stolen or a total loss. This difference is what's referred to as the "gap". In general, this "gap" occurs when you buy a new vehicle, the value (actual cash value) can start going down right away.

What happens if your car is stolen and you still owe money?

What happens if your car is stolen and you still owe money? Unfortunately, when your car is stolen, you are still obligated to make payments on it. If your insurance claim payout is approved, you can use the claims check to pay against any amount owed.

How Does GAP Insurance Work After A Car Is Stolen? - InsuranceGuide360.com

39 related questions found

Will gap insurance cover a stolen car?

GAP insurance is optional car insurance that can help pay off your loan if your car is totaled in an accident or stolen and you owe more than the car's depreciated value.

Do you get reimbursed if your car is stolen?

If your car has been stolen and you have comprehensive coverage, you should promptly file a claim with your auto insurer. Your insurer will likely investigate the theft. Once the investigation of a covered claim is complete, your insurer will reimburse you for your stolen car, up to your comprehensive coverage limit.

Do you get money from gap insurance?

You'll only receive a refund for the GAP insurance that you haven't used. For example, if you cancel your policy after three months of coverage, you'll only get a refund for the remaining nine months (if you paid for a year of coverage). The amount of your refund is based on how you pay your insurance bill.

What is the most gap insurance will pay?

The most gap insurance will pay is the full amount left on your loan or lease after your insurer pays your vehicle's actual cash value for a covered collision or comprehensive insurance claim. The exact amount gap insurance will pay depends on the balance of your loan or lease and the value of your car.

Does gap insurance give you money for a down payment?

Gap insurance will only cover what is left on your loan after an insurance company pays out. In other words, no, it won't cover the down payment you made initially because it wasn't part of the loan amount.

How does an insurance company determine the value of a stolen car?

Insurance companies generally use your car's ACV to determine whether it's a total loss after an accident. If you have comprehensive or collision coverage, most auto insurance policies will also largely base your payment on the car's ACV after it's totaled or stolen.

How long does it take to recover a stolen car?

If you report your car as stolen immediately to police, there's a better chance it will be recovered. In fact, according to NICB data, 35% of recovered stolen vehicles are recovered on the same day as the theft, and 45% are recovered within two days.

What happens if your car is stolen and you still owe money on Reddit?

You'll still owe the remainder of the loan. With theft coverage? If you had GAP insurance, you'll get whatever is owed on the loan. If you didn't have GAP insurance, you'll get the actual cash value of the car, and you'll owe whatever the difference is between what is owed on the loan and the ACV.

Why would gap insurance not pay?

GAP does not pay out if the insurance company deems your vehicle a total loss and you do not carry comprehensive and collision coverage. GAP does not include costs beyond the difference between your loan balance and the car's value. This means it does not cover missed loan payments or extra rental car costs.

What cancels out gap insurance?

You can cancel gap insurance and request a refund if you sell or trade in your car, want to change insurance companies or no longer owe more on your loan than your car is worth.

Does gap insurance automatically kick in?

Does gap insurance automatically kick in? No, gap insurance doesn't automatically activate. It comes into play when your vehicle is totaled or stolen and the payout from standard auto insurance doesn't cover the remaining loan balance.

What exactly does gap insurance cover?

Gap insurance stands for Guaranteed Asset Protection insurance. It is an optional, add-on coverage that can help certain drivers cover the “gap” between the financed amount owed on their car and their car's actual cash value (ACV), in the event of a covered incident where their car is declared a total loss.

What is better than gap insurance?

Car replacement assistance versus gap insurance.

Standard gap insurance will pay off your loan, but nothing more. Car replacement assistance pays you 20% more than the car's ACV, whether you're making car payments or not. The money goes directly to you, so you can decide how to use it.

At what point is gap insurance worth it?

However, gap insurance makes sense when your auto loan balance is likely to exceed the actual value of the car. This usually happens when: You put little or no money down when you financed your car. Your trade-in vehicle was less than what you owed on that loan, and that amount was added to your new car loan.

Does gap insurance write you a check?

If you have gap insurance, it can help cover the difference in the event you have a total loss, minus the policy's deductible. It is important to understand that having gap insurance doesn't mean that your insurance provider will write you a check for what you originally paid for the car.

How much does gap insurance raise your payment?

Our review of GAP coverage added to an auto insurance policy ranges from $15.00 per year to $42.00 per year. The insurance company charges usually between 5% and 7% of the comprehensive and collision premium on the auto for gap insurance.

What happens if you total a financed car with gap insurance?

GAP insurance will pay the difference between the ACV paid by your primary insurer and the remaining balance on your car loan. For example, if you owe $20,000 on your loan but your car's ACV is only $15,000, your primary insurance will cover the $15,000, and GAP insurance will cover the remaining $5,000.

How much will insurance give me if my car is stolen?

Car Theft Insurance: When Am I Entitled to Coverage? Downey drivers whose cars are stolen in Califonia will have car theft insurance if they have comprehensive coverage. That should cover you up to the Actual Cash Value (ACV) of your vehicle. If your car is damaged due to a break-in, you'll also be covered.

Does insurance pay off your car if it's stolen?

If the vehicle is declared a total loss, your insurance company pays the actual cash value, just as they would if the car was stolen and not recovered. In both situations, your deductible would apply and be deducted from the claim payout.

What happens after my car is stolen?

After you've filed a report with the police, the next call you need to make is to your insurance company. They will guide you through the process of filing a claim. Be prepared to provide them with information such as your policy number, the police report number and any other relevant details they may require.