Will GAP insurance cover a stolen car?
Asked by: Kyra Ratke | Last update: November 10, 2025Score: 4.7/5 (7 votes)
How does gap insurance work with a stolen car?
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.
What type of insurance covers a stolen car?
Liability insurance will cover you if you cause bodily injury or property damage to someone else, but it won't cover a stolen vehicle. Collision coverage won't protect you from theft either. Comprehensive is the only coverage that can cover car theft or damage to your car caused by theft or break-in.
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.
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.
TOTAL YOUR CAR | WRECK OR STOLEN WITH A LOAN OUTSTANDING | YOU WILL BE GLAD YOU HAD GAP INSURANCE!!!
Will gap insurance pay me?
When your loan amount is more than your vehicle is worth, gap insurance coverage pays the difference. For example, if you owe $25,000 on your loan and your car is only worth $20,000, your gap coverage covers the $5,000 gap, minus your deductible.
What does gap insurance exclude?
More specifically, GAP insurance will cover that difference in the case of a total loss and theft, but it will not cover deductible costs. In addition, it cannot be used to cover costs associated to vehicle repairs and bodily injuries as a result of an incident.
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.
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 long does it take for insurance to pay out on a stolen vehicle?
How long does it take for insurance to pay out on a stolen vehicle? The timeframe of an insurance payout for a stolen vehicle varies based on the company. But in general, you should expect the funds after a 30-day waiting period.
What happens when your car is stolen then found?
You'll need to transfer the title of your vehicle at or before time of payment to resolve the claim. This means that if your car is found after your claim has been resolved and paid out, your insurance company will take ownership of it. There is nothing else you need to do.
Does insurance go up if a car is stolen?
Claim History: If you have filed claims in the past, adding another claim for a stolen vehicle could be seen as increasing your risk profile, which might lead to higher premiums. Insurance Coverage: The type of coverage you have can also play a role. Comprehensive coverage is what typically covers theft of a vehicle.
How to claim GAP insurance?
You can start by contacting the GAP insurance company or the dealer to see how to initiate your claim. You'll need the proper documentation to help prove the difference between the amount you owe on your loan or lease and the vehicle's actual cash value.
What happens if your car gets stolen and you have full coverage state farm?
Comprehensive coverage helps pay to repair or replace a covered vehicle that's stolen or damaged by something other than collision or rolling over. Contact a State Farm ® agent if you want to learn about the different coverage options available for cars.
How long does GAP insurance stay on your car?
GAP insurance lasts as long as you need it to, with most drivers keeping their policies active for a year or two.
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 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.
What exactly does gap insurance cover?
Gap insurance may also be called "loan/lease gap coverage." This type of coverage is only available if you're the original loan or leaseholder on a new vehicle. Gap insurance helps pay the gap between the depreciated value of your car and what you still owe on the car.
Will gap insurance pay off my loan if my car is totaled?
Gap insurance pays off your car loan after your main coverage pays you the actual value of your totaled or stolen vehicle. That's important because depreciation can result in a loan balance that's higher than the vehicle's value.
Will gap insurance reimburse me?
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.
Is it too late to get gap insurance after an accident?
If you get into a minor fender bender and you're within the eligibility time frame, you can probably still get gap insurance. However, you can't get gap insurance after an accident that totals your vehicle. At that point, you are stuck paying off your auto loan balance out-of-pocket.
How does gap insurance work if a car is stolen?
So, if you took out a loan or leased a car, and the car is totaled or stolen before you can pay off the loan, GAP insurance will cover the difference between what you owe on the loan and the car's resale value.
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 full coverage cover theft?
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.