If you’ve been reading this blog, you know that we (Mr. Duck and I) recently paid off one of our auto loans. Just last week, we received the official title, signed over to our ownership!  In addition, the bank gave us a friendly reminder of some refunds we may be entitled to.

As a a part of the financing for this vehicle, we purchased life insurance and GAP insurance.  Both of these insurance policies were contracted for a specific number of months.  We paid the loan off in just 23 months (but financed for 72 – yes, I’m aware of how stupid that was) so we were entitled to pro-rated refunds for both policies.

The life insurance policy was purchased to be used in the event that Mr. Duck or I passed away before the loan was paid off.  The insurance was supposed to pay off the remaining balance of the loan.  We paid about $650 for a policy that was contracted to last 60 months.  Since the loan was paid off in 23 months, we were entitled to a pro-rated refund for the remaining 37 months.

We also paid for Gap Insurance.  For anyone that doesn’t know, Gap insurance is used to fund the difference between the outstanding loan balance and vehicle value in the event that the vehicle is totaled.  We paid $699 (a bit on the high-end) for this policy.  It’s a relatively inexpensive form of insurance, so I see no reason for not purchasing it when financing a vehicle.  Since we paid off our loan early, we were entitled to a pro-rated refund for this as well.

Requesting the refunds was a fairly simple process.  To be honest, I expected it to be much more difficult than it was.  First, I had to call the life insurance company to find out what they required for issuing a refund.  They gave me very simple instructions.  I wrote a quick letter, made a copy of the title and dropped them in the mail.  I was told the refund should arrive within 6 – 8 weeks.  Since I mailed the request last week, I’m still waiting on the refund check.

For the Gap insurance, Mr. Duck called the auto dealership and had a Refund Request form emailed to him.  We filled out the form and dropped it in the mail with a copy of the title.  I’m expecting to see the refund check in the next couple of weeks.

Some minor (read: easy) paperwork had to be done, but it didn’t take much time or effort.  All-in-all, I probably spent about an hour getting everything taken care off.  We’re anticipating between $500 – $800 in return, so it was well worth the time.

Prior to receiving a reminder from the bank about these refunds, I had forgotten all about requesting refunds.  I’m sure that many people out there are completely unaware that sometimes insurance premiums can be refunded, so I wanted to share this story with my readers.  A little bit of work is resulting in a pretty nice return (even though the refunded money was mine to begin with)!

If you have any questions about requesting an insurance premium refund, feel free to comment on this post or email me.

P.S. – In case you were wondering; yes, we’ll be putting most of the refund money toward debt reduction.

-SDuck
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