SGFCU has joined forces with Intercontinental Warranty Service, Inc. (IWS) to offer you GUARANTEED ASSET PROTECTION (GAP). Through partnerships with insurance carriers who are rated A or better, by leading insurance analyst A. M. Best Co., Inc. IWS brings peace of mind and financial security to credit union members nationwide.
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WHAT IS GAP?
Guaranteed Asset Protection coverage pays the difference between the scheduled principal balance on your auto loan and the actual cash value (ACV) of your vehicle.
WHAT DOES GAP COVER?
GAP pays the difference between the outstanding scheduled principal balance and the vehicle's actual cash value, determined by your primary auto insurance carrier, on your auto loan or lease in the event of total loss or theft. GAP covers up to $1,000 of the borrower's deductible if there is a "GAP" after the primary insurance settlement is paid
EXAMPLE:
| Insurance Settlement |
|
Loan Settlement |
|
| Actual Cash Value |
$16,000 |
$20,000 |
Outstanding Loan Balance |
| Insurance Deductible |
-$1,000 |
-$15,000 |
Insurance Settlement |
|
| Insurance Settlement |
$15,000 |
$5,000 |
GAP |
GAP Statistics
- According to Automotive News the average new car will lose 60% of its value over 3 years of normal driving.
- The Insurance Information Institute estimates that one vehicle is stolen in the United States every 24 seconds.
- CCC Information Services, a firm that supplies the automotive claims and collision repair industries with collision statistics, tells us that 18% of vehicles involved in a collision will result in a total loss.
- Insurance companies report that on an annual basis they write off 500,000 insured vehicles due to total loss, fire or theft.
However, you may be surprised to learn that in the event of a total loss, the settlement amount received from your insurance company is the actual cash or market value of your vehicle. In many cases, this amount is less than what you owe the lender or lease company and you are responsible for the difference.
IWS Offers Members the following Guaranteed Asset Protection (GAP) plans:
Standard Coverage: pays the difference between the actual cash value (ACV), established by the primary casualty insurance carrier, and the principal amount or lease deficiency.
GAP also covers up to $1,000 of the borrower's deductible. The deductible benefit is not available for lenders located in certain states.
Premium Coverages: Advantage and Plus includes the Standard features in addition to providing members with replacement vehicle assistance of $1,000. With Advantage, if the borrower's primary insurance settlement pays off the loan balance in full, the borrower is still eligible for this benefit. This amount can be used to reduce the amount of the new loan when financing or leasing a replacement vehicle at the same credit union. Coverage is not available in all state.
How Do I Get GAP Protection?
GAP is available for a nominal cost and may be purchased anytime during the loan term. However, it is generally not recommended after 18 months into the loan. Ask your loan representative for details.
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