How to cancel gap insurance

To cancel your gap insurance, contact the company providing coverage, such as the dealership where you bought your car or your insurer. If canceling coverage you purchased through a dealership, you should contact the dealership or coverage provider directly. You may need to sign a cancellation form and other documents. If you have coverage through your insurance company, you can typically call or go online to remove gap coverage from your policy.

2 min to read

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

Can I cancel gap insurance and get a refund?

Typically, you can cancel gap insurance at any time. However, your leasing company may require you to keep your gap coverage if you have a leased vehicle. You may cancel coverage for several reasons including selling your car or switching to a new gap insurance provider. You might also cancel when your loan balance is less than the car's actual cash value. You may receive a refund for your gap insurance if you've paid for your coverage upfront. Learn more about gap insurance on a leased car.

Pro tip:

In most states, Progressive offers loan/lease payoff coverage, like gap 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. However, 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.

How long does it take to get a gap insurance refund?

It depends on the coverage provider. If you're canceling an auto policy with gap coverage, or gap insurance through a dealership, then you may receive a refund for any additional months of coverage for which you've already paid. If you're removing gap coverage from your auto insurance policy, then your insurer may apply a credit to your account instead, if applicable.

Three reasons you might want to cancel gap insurance

You owe less on your auto loan

Once you owe less on your car loan than what the car is worth, you generally don't need gap insurance.

To switch coverage providers

Buying gap coverage through your auto insurer may be cheaper than paying for coverage through a dealership. If your insurer offers a better deal, you can cancel your gap insurance from the dealership and add it to your auto policy instead.

You sold your car

If you sell the vehicle with gap coverage, you can remove the coverage from your auto policy. If your gap coverage was provided through a dealership, you can cancel it once your loan or lease is paid off.