Podcast
Questions and Answers
What is the main purpose of the GAP Addendum?
What is the main purpose of the GAP Addendum?
Which of the following is NOT a responsibility of the borrower according to the GAP Addendum?
Which of the following is NOT a responsibility of the borrower according to the GAP Addendum?
When does the GAP Addendum terminate?
When does the GAP Addendum terminate?
What is defined as a "Constructive Total Loss"?
What is defined as a "Constructive Total Loss"?
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Which of the following vehicles is NOT covered under the GAP Addendum?
Which of the following vehicles is NOT covered under the GAP Addendum?
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What is the maximum deductible amount waived by the GAP Addendum on the Primary Carrier's policy?
What is the maximum deductible amount waived by the GAP Addendum on the Primary Carrier's policy?
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Under what condition is there no right to cancel the GAP Addendum?
Under what condition is there no right to cancel the GAP Addendum?
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Which document is NOT required to be submitted in the event of a Constructive Total Loss?
Which document is NOT required to be submitted in the event of a Constructive Total Loss?
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What happens if a customer misrepresents any material fact related to a benefit request?
What happens if a customer misrepresents any material fact related to a benefit request?
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What is the process for canceling the GAP Addendum within 30 days of purchase?
What is the process for canceling the GAP Addendum within 30 days of purchase?
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Study Notes
GAP Addendum Overview
- Assists in waiving the GAP amount when a vehicle is declared a constructive total loss.
- Serves to protect borrowers in specific circumstances, but does not cover collision insurance or maintenance services.
Borrower Responsibilities
- Borrowers must maintain collision and comprehensive insurance on their vehicles.
- Required to notify the seller/creditor for coverage cancellations.
- Does not include the responsibility for processing insurance claims on behalf of the seller/creditor.
Termination of the GAP Addendum
- The GAP Addendum concludes upon full payment of the financing contract.
- Other events, such as vehicle theft or maintenance, do not automatically terminate the addendum.
Constructive Total Loss Definition
- Defined as accidental damage or theft that results in the vehicle being declared a total loss, affecting the coverage under the GAP Addendum.
Vehicle Coverage Limitations
- Vehicles used for ridesharing services (e.g., Uber or Lyft) and commercial vehicles such as limousines or taxis are not covered by the GAP Addendum.
Deductible Waiver
- The GAP Addendum can waive a maximum deductible of $1,000 on the Primary Carrier's policy.
Cancellation Rights
- Right to cancel the GAP Addendum is voided once a benefit has been provided or is in process.
Required Documentation for Constructive Total Loss
- Original financing contract and a copy of the insurance settlement check are necessary.
- Vehicle registration is not required to be submitted for a constructive total loss claim.
Misrepresentation Consequences
- If a customer misrepresents material facts related to benefit requests, the GAP Addendum is voided and previously incurred charges may be refunded.
Cancellation Process
- Within 30 days of purchase, customers need to notify the seller/creditor in writing to cancel the GAP Addendum.
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Description
Test your understanding of the GAP Addendum and its implications for vehicle insurance. This quiz will challenge your knowledge about its purpose and the responsibilities of the borrower. Dive in and see how well you know this important component of auto financing.
