Everything You Need to Know About Phoenix American Administrators Inc. Gap Insurance

If you’ve shopped for a new or used car recently, you may have heard about gap insurance through Phoenix American Administrators Inc. With nearly 40 years of experience in the industry, Phoenix American has become a leading provider of gap insurance plans.

In this comprehensive guide, I’ll explain everything you need to know about Phoenix American gap coverage – how it works the benefits, costs, and more. Whether you’re considering gap or just curious to learn about this optional protection read on for the details.

What is Gap Insurance from Phoenix American?

Gap insurance is a special type of coverage designed to pay the gap between what your auto insurance pays if your vehicle is totaled and what you still owe on your car loan. For example

• Your car is totaled in an accident
• It was worth $15,000 at the time of loss
• But you still owed $18,000 on your auto loan

Without gap coverage, you would be stuck paying $3,000 out of pocket – the “gap” between the value and remaining loan balance. Gap insurance covers this difference so you don’t take a financial loss.

Phoenix American Administrators Inc. is one of the top providers of gap insurance in North America. Headquartered in Miami, Florida, they have offered gap plans through dealerships since 1985.

Phoenix American gap coverage can be included in your finance contract when you purchase or lease a new or used car or truck. It protects you if your vehicle is totaled due to an accident, theft, natural disaster or other covered loss during the policy term.

How Phoenix American Gap Insurance Works

Gap coverage from Phoenix American is simple and straightforward. Here are the basics of how it works when you suffer a total loss:

1. Your car is totaled – This could result from an accident, natural disaster, theft etc. If the repairs exceed 75-80% of the car’s pre-loss value, your insurer will deem it a total loss.

2. Primary insurance pays out ACV – You first file a claim with your regular car insurance provider. They will determine the actual cash value (ACV) of your vehicle at the time of loss and issue a payout.

3. Loan balance determined – The lender calculates the remaining unpaid balance on your auto loan at the time of loss.

4. Phoenix American pays the gap – If the ACV payout doesn’t fully pay off your loan, Phoenix American gap coverage will pay the difference. This protects you from owing any additional money.

Gap insurance is designed to minimize financial loss, not pay you a profit. So the total payout between your primary auto policy and the gap plan will not exceed your original loan balance.

Benefits of Gap Coverage from Phoenix American

There are many good reasons to consider gap insurance from Phoenix American for your new or used car purchase:

Protects from upside down loans – If you still owe more than your car is worth, gap prevents you from being “upside down” on your totaled vehicle. This scenario is common with new cars that depreciate rapidly and long auto loans.

Covers deductibles – Phoenix American gap plans cover your primary auto insurance deductible, often $500-$1,000. This provides complete protection.

Allows for new car replacement – You can use your total payoff to purchase a replacement vehicle right away instead of continuing payments on a totaled car.

Cancelable at any time – You can cancel your Phoenix American gap policy anytime and receive a partial refund. Cancellation won’t impact your auto loan.

Easy claims process – Phoenix American prides itself on fast claims handling with payments issued within 2 days of receiving your auto settlement.

Bundled with lease wear coverage – With a leased vehicle, gap coverage can be bundled with lease wear protection for extra protection at the end of your term.

Overall gap insurance brings valuable peace of mind that a total loss won’t derail your finances. It’s worth considering for any financed vehicle purchase.

What Does Phoenix American Gap Insurance Cost?

The cost of gap coverage from Phoenix American will depend on a variety of factors like your auto loan term, vehicle, downpayment, credit score and more. However, some typical costs include:

• For a 4 year auto loan, expect to pay $380 – $700 total

• On a 3 year lease, gap coverage may cost $200 – $400

• With a $0 downpayment, gap runs $400 – $800 for an average loan

The price is usually lowest when gap insurance is added at the time of purchase or lease. But Phoenix American also offers coverage after-the-fact on existing loans.

Gap insurance costs more on loans with longer terms, higher balances, and less downpayment equity. But it provides protection when you need it most.

Many lenders also offer gap coverage. Phoenix American is often cheaper, providing better value. Your dealer can compare options during the finance process.

When Phoenix American Gap Coverage Makes Sense

While gap insurance isn’t mandatory, it’s highly recommended in certain situations where your loan amount is likely to exceed the vehicle’s value. Smart times to get Phoenix American gap include:

You make a low downpayment – With little initial equity, your loan will remain higher than the car’s depreciating value for longer. Gap protects this disparity.

You take a long auto loan term – Loans exceeding 60 months often create a wide gap, since vehicles depreciate faster than payments. Longer loans have higher risk.

You have bad credit – Lower credit often means higher interest rates and loan balances relative to the car’s worth. Gap minimizes downside risk.

You lease extra miles – Exceeding mileage limits leaves excessive wear-and-tear risk at lease-end. Phoenix American gap with lease wear protection provides a safeguard.

You purchase a hybrid/electric – These vehicles tend to depreciate faster than gas models. The loan balance gap widens more quickly.

Gap coverage provides the most benefit for buyers with higher-risk loans and leases. But it can give anyone with a financed vehicle purchase added peace of mind.

Applying for Phoenix American Gap Insurance

Getting gap coverage from Phoenix American is fast and convenient when purchasing or leasing a new vehicle:

At the dealership – Let your dealer know you want to add gap insurance during the financing process. They will include it in your contract paperwork and monthly payment.

With an auto loan – If financing through a bank or other lender, request to add gap insurance from Phoenix American to your loan.

On a lease – The leasing agent can include Phoenix American gap coverage in your lease agreement if requested. Make sure to ask about bundled lease wear protection.

You can also contact Phoenix American to add gap insurance on your existing auto loan or lease up to 90 days after purchase. Their licensed agents can explain your options.

How are Claims Handled?

One common consumer concern with any insurance product is how the claims process will work. Phoenix American gap insurance is designed to make filing a total loss claim simple and fast.

Here’s what to expect in the event your vehicle is totaled:

Contact Phoenix American – You or your insurer will notify Phoenix American of the total loss and initiate the claims process.

Provide loan/lease documents – You’ll submit your auto loan or lease paperwork showing the remaining balance and terms.

Authorized payment issued – Phoenix American will verify your details and documentation. Once approved, they will issue payment to your lender within 2 business days.

Lender applies payment – Your finance company or leasing provider will apply the Phoenix American payout to your remaining loan or lease balance.

With electronic filing and fast claims handling, Phoenix American strives to make the process smooth and convenient. Most policyholders receive gap plan payouts in under a week.

Cancelling a Phoenix American Gap Policy

One of the benefits provided by Phoenix American is the ability to cancel your gap insurance policy anytime and receive a partial refund proportional to the remaining unused term.

To cancel, simply contact Phoenix American’s customer service department in writing indicating you wish to cancel your policy. You can mail or email your cancellation request. Some reasons you may choose to cancel include:

• You pay down your auto loan significantly
• You are nearing the end of your loan term
• You sell or trade in the vehicle
• You refinance your loan with better terms

As long as no covered loss has occurred, Phoenix American will calculate your refund based on the unused portion of your gap policy. They will issue payment within 60 days of your cancellation request.

Why Choose Phoenix American Gap Coverage?

With decades of experience as an insurer and administrator of vehicle service contracts and protection products, Phoenix American has a strong reputation in the industry. Here are some key reasons to choose them for gap insurance:

A+ rating – Phoenix American maintains an excellent A+ financial strength rating from AM Best Company. This indicates stability and reliability.

Industry leader – As one of the first and largest gap insurance providers, Phoenix American sets the standard for coverage, service and claims.

Broad product range – They offer gap policies