Colorado vehicle owners shorted of loan protection benefit will see refunds
Just under $122,000 in refunds has been secured for 171 Colorado vehicle owners who did not receive their full GAP benefits from a Colorado company, according to the attorney general’s office.
Guaranteed automobile protection (GAP) is an optional benefit offered to car buyers who finance their purchase, according to an AG’s office news release. “If a buyer’s car is totaled in an accident, the buyer’s auto insurance typically pays only the fair market value of the car, which can be less than the amount owed on the buyer’s loan.”
GAP coverage is used to bridge the difference and pay off a remaining balance owed on a car loan.
American Assurance Corp. — a Lakewood-based company that acts as the GAP administrator between lenders, dealers, and consumers — did not always pay full coverage owed to consumers under Colorado law, according to the AG’s office.
“We are committed to ensuring hardworking Coloradans receive the full GAP benefits they are entitled to,” said Attorney General Phil Weiser, in the release. “Our office will protect consumers by holding accountable institutions that fail to fully pay the amounts owed for GAP coverage or keep charging GAP coverage after a vehicle is already paid off.”
The company cooperated with the AG’s investigation and agreed to promptly and fully refund $121,983 to consumers whose benefits were improperly withheld.
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