GAP Refund Laws by State
Last reviewed: July 2026
Quick answer: Six states — Alabama, California, Colorado, Texas, New Jersey, and Oregon — require GAP refunds automatically when your loan ends early, no request needed (Indiana also refunds automatically on full prepayment). A majority of states have adopted some form of the GAPA Model Act, which typically requires a written request, often within 90 days of payoff — so act quickly. Everywhere else, your GAP contract itself almost always promises the refund; you just have to demand it. See your state in the 50-state table ↓
When a loan ends early — payoff, refinance, trade-in, or sale — the unused portion of GAP coverage is generally refundable. Whether that refund is guaranteed by state law or by the contract's own terms varies by state. The table below shows what we've verified against state statutes, administrative codes, and federal enforcement actions.
New to GAP refunds? Learn how a gap insurance refund works, and see how long does a gap insurance refund take in your state.
Two regulatory models
6 states: AL, CA, CO, NJ, OR, TX
The lender or creditor must issue the refund automatically — without a consumer request — within a fixed deadline (30–60 days). These states often include price caps, prohibition on cancellation fees, and penalty provisions (e.g., California's treble damages). Indiana also requires an automatic refund on full prepayment, and Vermont lets you cancel any time with no written request.
Roughly two dozen states
The borrower must submit a written cancellation request, typically within 90 days of the terminating event. Features a 30-day free-look with full refund, and a pro-rata refund of the unearned portion "unless the waiver provides otherwise." If you don't request it in time, you may lose the right to a refund.
The 50-state table
| State | Refund required? | |
|---|---|---|
Alabama Ala. Code §8-37-1 et seq. (cancellation §8-37-6) Full Alabama guide → | Yes, automatic within 60 days | |
Alaska No GAP-specific statute | Contract controls | |
Arizona No GAP-specific statute | Contract controls | |
Arkansas Ark. Code §4-90-801 et seq. (cancellation §4-90-806) | Yes, on request | |
California Civil Code §2982.12 (AB 2311) Full California guide → | Yes, automatic (2023+ contracts) | |
Colorado Colo. Rev. Stat. §5-9.3-101 et seq. | Yes, automatic (2024+ agreements) | |
Connecticut No GAP-specific statute; Conn. Gen. Stat. §42-260 (RISA) | General unearned-charge rule | |
Delaware No GAP-specific statute | Contract controls | |
Florida Fla. Stat. §520.07(11) Full Florida guide → | Yes, on written request (2024+ contracts) | |
Georgia O.C.G.A. §33-63-1 et seq. (cancellation §33-63-7) Full Georgia guide → | Yes, on request | |
Hawaii No GAP-specific statute; Haw. Rev. Stat. §481X | Contract controls | |
Idaho No GAP-specific statute; UCCC may apply | Contract controls | |
Illinois No GAP-specific statute | Contract controls | |
Indiana Ind. Code §24-4.5-2-202 & §24-4.5-3-202 (IUCCC) Full Indiana guide → | Yes, automatic on prepayment | |
Iowa Iowa Code §537.2510(10) (HF 133, eff. 7/1/2023) | Yes, automatic on prepayment | |
Kansas Consumer Credit Comm'r Adm. Int. No. 1004 | General unearned-charge rule | |
Kentucky No GAP-specific statute; Ky. Rev. Stat. 304.5-070 | Contract controls | |
Louisiana La. Stat. §6:969.51 et seq. (cancellation §6:969.53) | Yes, on request | |
Maine 10 M.R.S. §1500-H (Title 10, ch. 229) | Yes, on request | |
Maryland Md. Code Com. Law tit. 12, subt. 6 (RISA; §§12-613, 12-620) | General unearned-charge rule | |
Massachusetts M.G.L. c. 140D §22 | Refund-delay penalties | |
Michigan MCL 492.21 et seq. (cancellation §492.29) Full Michigan guide → | Yes, on request | |
Minnesota Minn. Stat. ch. 59D (cancellation §59D.07) Full Minnesota guide → | Yes, on request | |
Mississippi Miss. Code §83-52-1 et seq. (cancellation §83-52-11) | Yes, on request | |
Missouri RSMo §407.2050 (SB 398, eff. 8/28/2023) | Yes, on request | |
Montana Mont. Code §30-14-2201 et seq. (cancellation §30-14-2206) | Yes, on request | |
Nebraska Neb. Rev. Stat. §45-1101 et seq. (cancellation §45-1106) | Yes, on request | |
Nevada Nev. Rev. Stat. §690D.200 | Yes, on request | |
New Hampshire RSA ch. 361-E (cancellation §361-E:5; amended 7/1/2024) | Yes, on request | |
New Jersey N.J. Stat. §17:16BB-6 Full New Jersey guide → | Yes, automatic | |
New Mexico No GAP-waiver statute; N.M. Stat. §59A-58-9 is the Service Contract Act | Contract controls | |
New York No GAP-refund statute; PPL §302-a & §312 are offer/disclosure rules | Contract controls | |
North Carolina N.C. Gen. Stat. §66-440 et seq. (cancellation §66-445) | Yes, on request | |
North Dakota N.D. Cent. Code §26.1-57-01 et seq. (cancellation §26.1-57-06) | Yes, on request | |
Ohio No GAP-specific statute; Ohio Rev. Code §1317.05(B) (RISA) | General unearned-charge rule | |
Oklahoma Okla. Stat. tit. 15 §140.2 et seq. (cancellation §140.4; eff. 11/1/2022) | Yes, on request | |
Oregon ORS 646A.781 Full Oregon guide → | Yes, automatic on termination | |
Pennsylvania No GAP-specific statute | Contract controls | |
Rhode Island 19 R.I. Gen. Laws §19-32-1 et seq. | Yes, on request | |
South Carolina S.C. Code §37-30-100 et seq. (cancellation §37-30-150) | Yes, on request | |
South Dakota No GAP-specific statute | Contract controls | |
Tennessee Tenn. Code §56-59-101 et seq. (cancellation §56-59-106) | Yes, on request | |
Texas Fin. Code §354.007 Full Texas guide → | Yes, automatic on early payoff | |
Utah Utah Code §31A-6b-101 et seq. (cancellation §31A-6b-303) | Yes, on request | |
Vermont 8 V.S.A. §10405 (debt protection agreements) | Yes, cancel anytime | |
Virginia Va. Code §38.2-6400 et seq. (cancellation §38.2-6404) Full Virginia guide → | Yes, on written request | |
Washington RCW ch. 48.160 Full Washington guide → | Yes, on written request | |
West Virginia W. Va. Code §33-4-23 (eff. 7/1/2018) | Yes, on request | |
Wisconsin Wis. Stat. §218.0148 | Yes, on cancellation | |
Wyoming Wyo. Stat. §40-14-454 (RISA) | General unearned-charge rule |
National-bank lenders (Wells Fargo, US Bank, etc.): complaints go to the federal CFPB at consumerfinance.gov/complaint.
Note: some state GAP laws exempt banks and credit unions — if your GAP came through a depository lender, a listed statute may not apply to your contract. Effective dates matter too: several laws (California 2023, Colorado 2024, Florida late 2024) apply only to contracts signed after those dates.
"Automatic" doesn't mean it happened
Even in states where the refund is legally automatic, enforcement records show lenders routinely fail to send it. Texas law required automatic refunds while one major bank shorted roughly 90,000 Texas borrower accounts; Colorado's Attorney General had to recover $23.5 million from lenders who simply didn't issue legally required refunds; and CFPB supervisory findings in 2024 identified failures to refund unearned GAP across all states. If you're in an automatic-refund state and your check never came, you don't have a weaker case — you have a lender that's overdue.
Federal backstop
In December 2022, the CFPB ordered Wells Fargo — as part of a $3.7 billion enforcement action — to refund unused GAP when loans end early, regardless of state law, and in 2023 ordered Toyota's finance arm to pay $60 million over hard-to-cancel add-on products including unrefunded GAP. CFPB supervisory guidance in 2024 identified failure to refund unearned GAP as an unfair practice. (Both consent orders were later terminated in 2025 after remediation, but they remain the clearest federal statements that unearned GAP belongs to the borrower.)
Other GAPA-model states
Most of the "on request" states above follow the GAPA Model Act template, verified against statutory text in July 2026: a free-look period (usually at least 30 days) with full refund, and a refund of the unearned purchase price on cancellation or early termination, typically "unless the waiver provides otherwise," on a written request within 90 days. Notable exceptions: Alabama's refund is creditor-initiated (automatic within 60 days), and Vermont allows cancellation at any time without a written request. A handful of rows (Arkansas, Iowa, Rhode Island, New Mexico, New York) remain at medium confidence pending regulator or verbatim-text confirmation.
Enforcement actions
GAP refunds are the single most-enforced auto add-on issue at both state and federal levels. These actions confirm that the unearned-GAP-refund duty is real and actively enforced.
Colorado AG GAP Refund Program
$23.5 million+ to ~132,000 consumers
Since 2019, Attorney General Weiser's office has secured over $23.5 million in GAP refunds to nearly 132,000 Coloradans through active enforcement of the UCCC.
Multiple settlements include: Wells Fargo ($9.58M / 51,434 accounts, March 2021), BBVA USA (~$1.68M / 5,209, Sept. 2021), Ent CU ($5.16M / 19,011), Premier Members CU ($792,873 / 2,563), Credit Union of Denver ($122,022 / 744, March 2022), Red Rocks CU ($312,268 / 1,328 + 8% interest, June 2022), Bellco & Canvas CUs ($4M / 49,487, Jan. 2023), and Safe-Guard / Jim Moran / Norman / National Auto Care (>$2.87M / 3,550, May 2023). Legal basis: Colorado UCCC and 4 CCR 902-1 Rule 8 (pre-2024); §5-9.3 (post-2024). File complaints at coag.gov/file-complaint.
Status: Active program
Massachusetts AG v. AmeriCredit / GM Financial
$1.85 million to ~2,000 consumers
GM Financial agreed to pay $1,849,182 to an independent trust, resolving allegations it failed to pay legally required interest after delays in refunding GAP enrollment fees.
Assurance of Discontinuance filed in Suffolk Superior Court. Legal basis: M.G.L. c. 140D §22 (18% interest on unrefunded credit balances) and c. 93A §5. More than 2,000 Massachusetts residents were eligible for restitution. This was part of a wave of enforcement actions in March 2022 where four lenders were ordered to provide refunds to approximately 24,000 consumers for unused GAP coverage.
Status: Settled
CFPB v. Wells Fargo Bank, N.A.
$2 billion+ consumer redress; $1.7 billion civil penalty
The largest CFPB settlement since the Bureau opened in 2011. Auto-servicing findings included failure to refund unused GAP on early payoff; the order requires Wells Fargo to refund unused GAP regardless of state law.
The order requires Wells Fargo to "ensure that the unused portion of GAP contracts … is refunded to the borrower when a loan is paid off or otherwise terminates early," and to maintain that practice "regardless of state law." The CFPB noted that Wells Fargo's failure to follow Texas regulations between 2017 and 2020 resulted in failing to make timely GAP fee refunds due to nearly 90,000 borrower accounts. The CFPB terminated this consent order in early 2025 after completion of remediation.
Status: Terminated early 2025 (remediation complete)
CFPB v. Toyota Motor Credit Corp.
$48 million to consumers; $12 million penalty
Including nearly $32 million to consumers who did not receive refunds on unearned GAP and CLAH premiums, and over $9.9 million to consumers who tried to cancel but were unable to do so.
Findings: failure to refund prepaid GAP/CLAH premiums to consumers who paid off loans or ended leases early; a "retention hotline" where representatives "were instructed to keep promoting the products until consumers verbally requested cancellation three times, at which point they told the consumers that they could only cancel in writing" (118,000+ calls, 2016 to 2021). Order required refunds within 45 days (GAP cancellation) / 60 days (third-party-administered GAP) regardless of state law. The CFPB terminated the order on May 12, 2025; per Bloomberg Law, the termination "specifically terminated Toyota's obligations to repay about $42 million of the redress payments."
Status: Terminated May 12, 2025
CFPB Supervisory Highlights
Supervisory findings (UDAAP)
Flagged failure to refund unearned GAP after early payoff, lease-end, or repossession as an unfair practice (UDAAP), independent of state law.
The Supervisory Highlights identified the failure to refund unearned GAP premiums as an unfair, deceptive, or abusive act or practice under federal law. This means that even in states without GAP-specific statutes, the failure to refund unearned GAP may violate federal consumer protection law. The guidance treated this duty as independent of state law; both related consent orders were later terminated in 2025.
Status: Published guidance (Oct. 2024)
Provider-specific guides
Some lenders and administrators have their own cancellation quirks — see our Westlake Financial guide or browse the full provider refund directory.
State-by-state guides
In-depth guides to each state's GAP refund statute, deadlines, and complaint process:
Frequently asked questions
Which states require automatic GAP refunds without a consumer request?
Alabama, California, Colorado, Texas, New Jersey, and Oregon require the refund to be issued automatically when the loan ends early, with no request needed (California from 2023 contracts onward; Colorado from 2024 agreements onward; Alabama within 60 days of termination). Indiana and Iowa also require an automatic refund on full prepayment — in Iowa the dealer must issue it within 60 days of the creditor's notice — and Vermont allows cancellation at any time without a written request. About two dozen more states have GAP laws that entitle you to a refund upon a written request, typically due within 90 days of payoff. Everywhere else, the refund right comes from your GAP contract itself.
What does "on request" mean for my state?
In GAPA Model Act states, which make up the majority, you must submit a written cancellation request, typically within 90 days of the terminating event (payoff, sale, refinance, or total loss). If you don't submit the request in time, you may lose your right to a refund even though the unearned portion exists.
What is the GAPA Model Act?
The Guaranteed Asset Protection Alliance (GAPA) Model Act is a template statute adopted by 27+ states. It classifies GAP waivers as "not insurance," mandates a 30-day free-look period with full refund, and entitles the borrower to a pro-rata refund of the unearned purchase price on cancellation or early termination, but requires the borrower to submit a written request within 90 days.
Has the CFPB taken action on GAP refunds?
Yes. In December 2022, the CFPB ordered Wells Fargo to provide more than $2 billion in consumer redress, including refunding unused GAP on early payoff regardless of state law. In November 2023, the CFPB ordered Toyota Motor Credit to pay $48 million to harmed consumers, including nearly $32 million for unrefunded GAP premiums. Both orders were terminated in 2025 after remediation, but they remain persuasive precedent on the underlying legal duty.
My state says "contract controls." Do I still have a refund right?
Usually yes. Even without a GAP-specific statute, the GAP addendum is a contract, and its cancellation section is enforceable. Nearly every GAP agreement promises a pro-rata refund of unused coverage when the loan ends early. The difference is that you'll need to rely on the contract terms rather than a state mandate, and you typically have to request it in writing.
How do I find out what my contract requires?
Look at the cancellation section of your GAP addendum or debt cancellation agreement; it names the refund method (pro-rata or Rule of 78s), any cancellation fee, the deadline, and where to send requests. If you don't have your contract, request a copy from your dealer, lender, or GAP administrator.
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This information is for educational purposes only and does not constitute legal, financial, or insurance advice. Fields shown as 'Per waiver' or 'Per statute' indicate details we're still confirming. Several state laws exempt banks and credit unions (West Virginia expressly; Iowa's credit code excludes 'financial institutions'), so a listed statute may not apply if your GAP came through a depository lender. Effective dates matter: California's law applies to contracts signed on or after Jan. 1, 2023; Colorado's to GAP agreements on or after Jan. 1, 2024; Florida's from Oct. 1, 2024; Missouri's from Feb. 23, 2024; New Hampshire's from July 1, 2024 — older contracts are governed by their own terms. GapInsuranceRefunds.com is a document-preparation and claim-assistance service, not a law firm.