How long does it take for gap insurance to pay?

A gap insurance claim can take several weeks to process, though it ultimately depends on the circumstances of the accident or theft that led you to file a claim. Your vehicle insurance company must first determine the actual cash value of your vehicle. Your gap insurance provider will then verify your loan or lease details before your gap coverage pays out.

4 min to read

Explore Progressive Answers' auto editorial guidelines to find out why you can trust the car insurance information you find here.

How do you file a gap insurance claim?

Depending on the provider, you may be able to file your gap insurance claim in person, over the phone, or online. If your vehicle is stolen or totaled, and your comprehensive car insurance or auto collision coverage claim is approved, then your gap insurer will pay your lienholder what is owed under your gap insurance policy.

If you have questions or are unsure of what to do, contact your car insurance company or gap insurance provider, and they can help. After you file your car insurance claim, you can typically track the gap insurance claims process until it's resolved.

Pro tip:

In most states, Progressive offers loan/lease payoff coverage, which is similar to gap insurance coverage but with a few key differences. One of the main differences is that the payout for loan/lease payoff coverage is limited to no more than 25% of your vehicle's value, though the exact limit varies by state. Loan/lease payoff also doesn't cover any additional charges related to a loan or lease, such as finance and excess mileage charges.

What documents do I need to file a gap insurance claim?

When you file your gap insurance claim, you need to provide documentation that shows the difference between what you owe on your loan or car lease and what the car was worth when it was stolen or totaled. Here's a list of documents the gap insurance company may ask you to provide:

  • Insurance settlement statement: A statement showing the vehicle's actual cash value and how much the vehicle insurance company reimbursed you for the loss.
  • Settlement check: A copy of the check paid to the lienholder/lessor from the vehicle insurance company after they process your claim showing the settlement amount.
  • Loan or lease contract: The original contract showing the financing terms of your loan or lease.
  • Loan history: A complete list of the charges and payments that have been made to your account. It must include the current outstanding balance.
  • Police report: A copy of the police report explaining what happened to the car and when.
  • Sales agreement: The original sales agreement from the dealer showing how much you paid for the car.

If you purchased gap insurance through the same company that provides your comprehensive and collision coverage, they would have access to some of these documents, which can help simplify the claims process.

When does gap insurance not pay?

The purpose of gap insurance is to protect you in only one scenario: you owe more on your loan or lease than the car is worth. In that case, the payout you receive from the insurance company isn't enough to pay off your outstanding loan or lease balance. Gap insurance won't pay for:

  • Injuries
  • Repairs to your vehicle
  • A new car
  • Damage to someone else's vehicle
  • Negative equity you rolled over from a previous loan
  • Cost of optional products such as vehicle service contracts

Additional charges related to your loan or lease agreement, such as excess mileage charges, may not be covered either. Note that you won't receive a payout from your gap insurance if you don't owe more than the car's worth.

Do I need to make my loan/lease payments after I file a claim?

Yes. Your agreement with the lender doesn't end just because you can no longer drive your car. If you stop making your payments while waiting to receive the gap insurance claim settlement, the lender can report it to the credit bureaus, which could negatively affect your credit.

So, it's important to keep making your loan/lease payments until you receive your settlement check. Then you can use the money to pay off your loan/lease balance.

Looking for more information about auto insurance? Our car insurance resource center has you covered.

Quote car insurance online or give us a call

Learn more about car insurance policies.