The Alberta Insurance Council (AIC) has given the greenlight for vehicle and equipment dealerships in the province to sell GAP insurance, provided they obtain a certificate of authority from the organisation.
GAP insurance covers all or a portion of the difference between the recovery received on primary automobile insurance in the event of a total loss and the manufacturer’s suggested retail price of a current year replacement vehicle, said the AIC. It can also cover the difference between the recovery on a primary automobile insurance policy and an outstanding loan or lease obligation in the event of total loss.
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On its website, AIC said it has issued restricted insurance agent licenses to certain dealerships to sell GAP insurance. In addition to the terms and conditions found in the Insurance Act, the AIC’s General Insurance Council (GIC) has prescribed certain conditions that will appear on the licenses. These include that certificate holders, and each insurer they represent, must establish a
procedure to ensure that the employees marketing products on their behalf are knowledgeable
about the insurance being marketed.
While the Government determines the types of businesses that are entitled to apply for these licenses, the GIC and AIC’s Life Insurance Council (LIC) has the authority to determine the types of insurance that can be sold under the restricted license and the conditions under which these products are marketed, according to AIC.
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