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State National GAP – Undeniably Better

Our high-quality GAP program protects borrowers and credit unions from charge-offs

By Francine Gagliano

As summer winds to a close and school is back in session — whether that be virtual, face-to-face, or some combination of both — we are all adjusting to the new normal thrust upon us by this anything-but-normal year. Across all industries, employees are beginning to return to the workplace and, consequently, the pent-up demand for new car purchases is manifesting itself in an increase in loan volumes.

Auto lenders have long recognized the value in protecting their collateralized loans with Guaranteed Asset Protection (GAP). However, not all GAP Programs are created equal. This may be an opportune time to reevaluate your GAP program and consider whether a change would be in the best interest of your credit union and members.

Why GAP Now?

GAP protects members for the difference between their primary insurer’s claim payment, settled using the current ACV of the vehicle, and their outstanding loan balance on the date of loss. Without GAP protecting the collateralized loan, members would still be responsible for this deficiency balance. Over the past few years, we have witnessed primary insurance carriers finding more and more creative ways to limit their settlements, thereby increasing borrower deficiency balances. At a time when many U.S. households have been impacted by quarantine, stay-at-home orders, or unemployment, having to potentially pay thousands of dollars on a loan where the collateral has been totaled or stolen may feel like yet another punch in the gut. Will this cause an increase in members who elect to just walk away from their loan? Time will tell — but with GAP protecting the loan, members (and your bottom line) are protected from loss.

Why State National GAP?

State National underwrites, offers for sale, and administers its own GAP product. Functioning in all three capacities means increased product and systems flexibility as well as lower costs to our lender partners due to not having to pay agent costs. 2020 marks our 20th year offering the State National GAP product and brings a renewed focus on our product portfolio of coverages. The following are just a few of the program features* available for a customizable product that will best meet the needs of your credit union and members.

Auto Deductible Reimbursement – Provides reimbursement of unlimited primary carrier physical damage deductibles for up to four household vehicles, as long as one is protected by GAP.

GAP Plus – Provides members with a $1,000 credit toward the purchase of a replacement vehicle when financed with your credit union.

Monroney Labels – Ensures you are lending in compliance with your underwriting guidelines by obtaining a copy of the collateral’s Monroney window sticker. The label can be obtained even when GAP is not sold on the associated loan.

Skip-a-Pays – Protects against a set number of skipped or extended payments included in the loan balance on the date of loss.

Our in-house proprietary platform, InsurTrak, is upgraded several times throughout the year to ensure we are providing a system that is easy for your staff to use while saving them precious time administering your GAP program. Sales, program administration, and claims submissions are all managed within InsurTrak.

And, speaking of claims, how many other GAP providers can say they settle claims in an average of two business days with minimal or no supporting documentation required? At a time when borrowers are more financially challenged than ever, doesn’t it make sense to partner with a GAP provider that puts them back on their feet as quickly as possible?

*Available features may vary by state.


State National Director of Client Services Francine Gagliano is an accomplished executive with experience in relationship management, product strategy and development, and process re-engineering. As Director, Francine leads our Client Executive Group in the Central Region to facilitate client satisfaction and retention while also managing our GAP product. In addition, she leads the State National Women’s Network’s Support subcommittee to help achieve greater work-life balance and mentoring opportunities for our female employees.

Contact us today if you would like to receive more information about our GAP product.
Francine Gagliano, State National Director of Client Services
817-265-2000 x1247 or fgagliano@statenational.com