Guaranteed Asset Protection (GAP)
Guaranteed Asset Protection (GAP) helps protect lenders and borrowers if a financed vehicle is totaled or stolen and the auto insurance settlement falls short of the remaining loan balance. By covering the difference between insurance proceeds and what the borrower still owes, GAP reduces deficiency risk for your institution and offers added peace of mind to your customers.
What GAP Coverage Can Include
We design GAP programs to fit your institution’s loan mix, risk tolerance, and operational processes.
Deficiency Balance Protection
Covers the difference between a borrower’s insurance payout and the outstanding loan balance after a covered total loss—helping prevent lenders from absorbing deficiency losses and borrowers from owing unexpected payoff amounts.
Loan Portfolio Risk Support
GAP is especially valuable in situations where loans are structured with small down payments, longer terms, or rapid depreciation, all of which can increase negative equity exposure.
Enhanced Customer Peace of Mind
Communicate the value of GAP protection to help borrowers feel confident knowing they won’t be left owing more than their vehicle’s worth in the event of a total loss.
Custom Program Design
We tailor coverage features and terms to match your institution’s policies and portfolio needs, ensuring seamless integration with your lending products and risk management strategy.
Why GAP Matters for Financial Institutions
Reduces Deficiency Risk
When insurance settlements don’t fully cover remaining loan balances, GAP helps absorb that difference—reducing out-of-pocket losses for your institution and borrowers.
Supports Borrower Satisfaction
Offering GAP can contribute to a stronger customer experience by mitigating unexpected financial obligations after a total loss.
reduce total loss exposure
GAP mitigates exposure when insurance settlements fall short of outstanding loan balances, helping financial institutions manage total loss risk more effectively.
Frequently Asked Questions
What is Guaranteed Asset Protection (GAP)?
GAP is an optional coverage designed to pay the difference between what a primary auto insurance policy pays after a total loss and what the borrower still owes on the auto loan.
Does GAP replace auto insurance?
No — GAP supplements primary auto insurance. Auto insurance pays up to the vehicle’s actual cash value; GAP addresses the shortfall between that payout and the remaining loan balance.
Is GAP required?
GAP is generally optional. It can be offered as part of your lender’s suite of protection products and should be clearly disclosed as an add-on option.
When does GAP apply?
GAP applies only if the financed vehicle is declared a total loss (including theft) covered by insurance and the settlement is insufficient to pay off the outstanding loan balance.
