Ontario vehicle owners are being urged to check their GAP insurance provider is licensed and can pay out any claim made.
GAP insurance typically comes into play when a vehicle is stolen or written off due to significant damage. If, for example, your insurer determines the vehicle’s value to be $24,000 but there’s still $30,000 owing on the loan, GAP insurance, typically sold when a vehicle is financed or leased, is intended to cover the difference.
According to the Financial Services Regulatory Authority of Ontario, GAP insurance sold by an unlicensed business, which can cost hundreds of dollars, may lead to claims not being paid out.
Authority insurance conduct head Erica Hiemstra says the advisory is all about ensuring consumers can protect their themselves.
Hiemstra urges that consumers considering the purchase of GAP insurance do their homework at the time of purchase or leasing.
Hiemstra says the GAP insurance warning serves another purpose.
Consumers who have purchased GAP insurance from an unlicensed business or individual may file a complaint by email at contactcentre@fsrao.ca or phone 1-800-668-0128.
(Written by: Paul Rellinger)
