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#2147637 - 09/26/17 06:31 PM GAP (Guarantee Automobile Protection) Paymnet
Reg Warrior Offline
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Joined: Jan 2017
Posts: 190
Does anyone know if there are any regulatory requirement for the posting of GAP checks to loan? Do the checks need to be effective date to the date of vehicle loss? Or effective dated with the date the GAP check was actual received?

Any help would be greatly appreciated.

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#2147647 - 09/26/17 06:47 PM Re: GAP (Guarantee Automobile Protection) Paymnet Reg Warrior
rlcarey Offline
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rlcarey
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Galveston, TX
I guess I am confused. GAP insurance pays the difference between what the normal collision insurance pays and the loan amount when car is totaled.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2147667 - 09/26/17 07:36 PM Re: GAP (Guarantee Automobile Protection) Paymnet Reg Warrior
Reg Warrior Offline
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We have some borrowers who prefer to make their monthly payments until the GAP check is received. They do no want a 30 or 60 day late showing on their credit report, should it take a while for the GAP claim to be processed.

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#2147670 - 09/26/17 07:48 PM Re: GAP (Guarantee Automobile Protection) Paymnet Reg Warrior
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
I would first advise you to check what your state Dept. of Insurance rules are concerning GAP.

IMHO the GAP should pay what the balance is as of the date of loss and any overpayments by the borrower would be refunded to them.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2147678 - 09/26/17 08:17 PM Re: GAP (Guarantee Automobile Protection) Paymnet Reg Warrior
rlcarey Offline
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rlcarey
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Galveston, TX
Is this a private policy or one that the bank sold them? If you sold it, the loan should be paid off the minute you get the check from their collision insurance and then settle with the GAP insurer outside of the realm of the loan to the consumer.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2147681 - 09/26/17 08:54 PM Re: GAP (Guarantee Automobile Protection) Paymnet Reg Warrior
Reg Warrior Offline
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Some are third-party that were obtained through dealer financing, some sold by the credit union. There would be no issue if the borrower didn't make any payments between the claim being filed and funds being received. It is the borrowers that continue to make payments. If we need to effective date the posting of the GAP funds to the date the claim was submitted, in addition to returning the overpayment of principal, we need to reimburse the interest payments that were part of the monthly payments that the borrower continued to make.

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#2147685 - 09/26/17 09:34 PM Re: GAP (Guarantee Automobile Protection) Paymnet Reg Warrior
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,649
Galveston, TX
If this was thru a third party, the borrower would still be responsible for the loan payments prior to the GAP insurance settlement being received according to your loan contract and I think you could continue interest accrual, etc., until the GAP insurance check arrived. If your CU sold them the insurance, I would say not considering the loan paid while you are waiting for the GAP to settle might be in UDAP territory. I think there is a big difference.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2147690 - 09/26/17 10:00 PM Re: GAP (Guarantee Automobile Protection) Paymnet Reg Warrior
Reg Warrior Offline
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Randy, Thanks for the guidance.

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