Guaranteed Asset Protection (GAP) Waiver - Are You In Compliance?
A retail vehicle seller who sells a guaranteed asset protection (GAP) waiver must hold a limited line agency or individual producer license, with the GAP waiver line of authority, issued by the Insurance Department. Unless licensed, a person may not sell, offer to sell, or otherwise provide a GAP Waiver in a retail vehicle sales transaction. Utah Code § 31A-6b-201.
Under this law, the license requirement applies to: (1) a retail vehicle seller that is a licensed legal entity; and (2) an individual.
If a licensed legal entity, such as a vehicle dealership, is the party that sells a vehicle, then the entity must have a limited line agency license to sell a GAP waiver. Additionally, an individual who represents the legal entity in discussing the sale of a GAP waiver with a customer must hold a limited line individual license.
If an individual, not a legal entity, is the party that sells a vehicle, then the individual is required to have a limited line individual license to sell a GAP waiver.
Licenses must be renewed every two years. If a GAP waiver is sold without the appropriate license, the Department may take enforcement action against the legal entity or the individual.