Gap Insurance Refund Calculator
If you paid for gap insurance upfront and cancelled early, you may be entitled to a pro-rata refund for the unused portion. Enter your details below to estimate your refund.
Your Gap Insurance Details
How the refund is calculated
Pro-rata method
Refund = Total Premium × (Months Remaining ÷ Total Months) Rule of 78s method
Refund = Total Premium × [Sum of digits remaining ÷ Sum of digits total] Sum of digits for N months = N × (N + 1) / 2. The Rule of 78s front-loads more of the earned premium into early months, giving you a smaller refund if you cancel in the first half of the term. Pro-rata treats every month equally.
Some providers also deduct a flat cancellation fee ($25–$75). Confirm this with your provider — this calculator does not model that deduction.
How to Cancel and Claim Your Refund
- Locate your gap agreement. It will name the gap provider (may differ from the dealer) and state the cancellation terms and refund method.
- Gather documentation. If cancelling because you paid off the loan, get a payoff confirmation letter from your lender. If you sold the car, get the bill of sale.
- Submit a cancellation request to the gap provider in writing. Many have a cancellation form; keep a copy.
- Track the refund timeline. Typically 4–6 weeks. If the gap was financed into your loan, the refund may go to your lender as a loan paydown — ask your lender to confirm receipt.
See also: Gap insurance calculator | How much does gap insurance cost? | Do I need gap insurance?
Frequently Asked Questions
You may be eligible if you paid for gap insurance upfront (not monthly) and cancel before the coverage period ends — either because you paid off the loan early, sold the vehicle, or refinanced. You are not eligible if you already filed a gap claim on the policy, if the policy expired naturally, or if it was cancelled for non-payment.
Pro-rata gives you a refund proportional to the unused time remaining. Rule of 78s weights earlier months more heavily than later ones, resulting in a smaller refund if you cancel early. Pro-rata is fairer to the policyholder. Some states require pro-rata by law; others allow Rule of 78s. Check your gap agreement and your state's insurance regulations.
Processing times vary by provider, but most refunds are issued within 4–6 weeks of receiving your cancellation request and required documentation (payoff letter from lender, odometer disclosure if requested). If the gap was dealer-sold and financed into your loan, the refund typically goes to your lender first to reduce your outstanding balance.
Typically: a signed cancellation request form (from your gap provider or dealer), a payoff letter or lien release from your lender showing the loan is closed (if paid off), and sometimes an odometer statement. Contact your gap provider directly for their specific requirements.
Yes. You can cancel gap insurance purchased at a dealership. Contact the dealership's F&I office or the gap provider listed in your agreement. Be aware that if the gap premium was financed into your loan, the refund may go directly to your lender as a loan paydown rather than to you in cash.