Virginia Code 38.2-6402: Contractual liability or other insurance policies
A. Contractual liability or other insurance policies insuring GAP waivers shall state the obligation of the insurer to reimburse or pay to the creditor any sums the creditor is legally obligated to waive under the GAP waivers issued by the creditor and purchased or held by the borrower.
Terms Used In Virginia Code 38.2-6402
- Borrower: means a debtor, retail buyer, or lessee, under a finance agreement. See Virginia Code 38.2-6400
- Creditor: means :
1. See Virginia Code 38.2-6400
- Finance agreement: means (i) a loan secured by a lien on a motor vehicle or (ii) a lease or retail installment sales contract for the lease or purchase of a motor vehicle. See Virginia Code 38.2-6400
- GAP waiver: means a contractual agreement wherein a creditor agrees for a separate charge to cancel or waive all or part of amounts due on a borrower's finance agreement in the event of a total physical damage loss or unrecovered theft of a motor vehicle, which agreement is part of, or a separate addendum to, the finance agreement. See Virginia Code 38.2-6400
- insurance policies: shall include contracts of fidelity, indemnity, guaranty and suretyship. See Virginia Code 38.2-100
- Insurer: means an insurance company licensed, registered, or otherwise authorized to do business under the laws of the Commonwealth. See Virginia Code 38.2-6400
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
B. Coverage under a contractual liability or other insurance policy insuring a GAP waiver shall also cover any subsequent assignee upon the assignment, sale, or transfer of the finance agreement.
C. Coverage under a contractual liability or other insurance policy insuring a GAP waiver shall remain in effect unless canceled or terminated in compliance with applicable insurance laws of the Commonwealth.
D. The cancellation or termination of a contractual liability or other insurance policy shall not reduce the insurer’s responsibility for GAP waivers issued by the creditor prior to the date of cancellation or termination and for which a premium has been received by the insurer.