Total Loss Fixed Benefit
Total Loss Fixed Benefit allows the customer to get a fixed benefit in the event their vehicle is totaled. This benefit can be used to help pay down the loan, help cover any deductions made by insurance, and could even be used for a down payment on their next vehicle.
COVERAGES
Total Loss Fixed Benefit pays out a fixed benefit depending on the coverage plan selected at the time of sale. These benefits are paid out in the event of a covered total loss, directly to the lender or the customer if payoff is provided.
ADVANTAGES
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Unlike GAP, TLFB can be sold on every deal not just financed deals; cash customers can get benefit.
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GAP benefits to the consumer reduce as the loan term is paid down, you will
always get the full benefit of the TLFB in the event of a total loss for the entire term of the contract. -
Common deductions for wear and tear noted on the insurance settlement by the
primary insurance carrier are typically deducted from vehicle valuations and
therefore can reduce GAP payouts; this does not happen with TLFB. -
TLFB is not GAP, it’s not based on any loan to value percentages and will not be
subject to any GAP regulations such as price caps or mandatory cancellations for lenders or dealers. Consumers have a choice to request a pro-rated cancellation anytime during the contract term. The consumer can choose to keep the coverage if they pay their loan off early. -
TLFB has a lower cancellation and chargeback rate than GAP insurance.
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Less paperwork is required to file a claim, therefore streamlining the claims process.