{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2026\/code-json\/38.2-6401.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2026\/code-text\/38.2-6401.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2026\/code-xml\/38.2-6401.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2026\/code-html\/38.2-6401.html"}],"law_id":362952,"edition_id":2,"section_id":362952,"structure_id":51809,"section_number":"38.2-6401","catch_line":"Requirements for offering guaranteed asset protection waivers","history":"2019, cc. 799, 800.","full_text":"A\n\nGuaranteed asset protection waivers may be offered, sold, or provided to borrowers in the Commonwealth in compliance with this chapter.\n\nB\n\nGAP waivers may, at the option of the creditor, be sold for a single payment or may be offered with a monthly or periodic payment option.\n\nC\n\nNotwithstanding any other provision of law, any cost to the borrower for a GAP waiver entered into in compliance with the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq., and its implementing regulations, as they may be amended from time to time, shall be separately stated and shall not be considered a finance charge or interest.\n\nD\n\nA retail seller shall insure its GAP waiver obligations under a contractual liability or other insurance policy issued by an insurer. A creditor, other than a retail seller, may insure its GAP waiver obligations under a contractual liability policy or other policy issued by an insurer as provided in § 38.2-6402. Any such insurance policy may be directly obtained by a creditor or retail seller or may be procured by an administrator to cover a creditor’s or retail seller’s obligations. However, retail sellers that are lessors on motor vehicles are not required to insure obligations related to GAP waivers on the leased vehicles.\n\nE\n\nThe GAP waiver shall remain a part of the finance agreement upon the assignment, sale, or transfer of the finance agreement by the creditor.\n\nF\n\nNeither the extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a GAP waiver.\n\nG\n\nAny creditor that offers a GAP waiver shall report the sale of GAP waivers and shall forward funds received on all GAP waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy, or other specified program documents.\n\nH\n\nFunds received or held by a creditor or administrator and belonging to an insurer, creditor, or administrator pursuant to the terms of a written agreement shall be held by the creditor or administrator in a fiduciary capacity.\n\n","order_by":null,"text":{"0":{"id":1352308,"text":"Guaranteed asset protection waivers may be offered, sold, or provided to borrowers in the Commonwealth in compliance with this chapter.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":1352309,"text":"GAP waivers may, at the option of the creditor, be sold for a single payment or may be offered with a monthly or periodic payment option.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":1352310,"text":"Notwithstanding any other provision of law, any cost to the borrower for a GAP waiver entered into in compliance with the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq., and its implementing regulations, as they may be amended from time to time, shall be separately stated and shall not be considered a finance charge or interest.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":1352311,"text":"A retail seller shall insure its GAP waiver obligations under a contractual liability or other insurance policy issued by an insurer. A creditor, other than a retail seller, may insure its GAP waiver obligations under a contractual liability policy or other policy issued by an insurer as provided in § 38.2-6402. Any such insurance policy may be directly obtained by a creditor or retail seller or may be procured by an administrator to cover a creditor’s or retail seller’s obligations. However, retail sellers that are lessors on motor vehicles are not required to insure obligations related to GAP waivers on the leased vehicles.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"4":{"id":1352312,"text":"The GAP waiver shall remain a part of the finance agreement upon the assignment, sale, or transfer of the finance agreement by the creditor.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"5":{"id":1352313,"text":"Neither the extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a GAP waiver.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"6":{"id":1352314,"text":"Any creditor that offers a GAP waiver shall report the sale of GAP waivers and shall forward funds received on all GAP waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy, or other specified program documents.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"7":{"id":1352315,"text":"Funds received or held by a creditor or administrator and belonging to an insurer, creditor, or administrator pursuant to the terms of a written agreement shall be held by the creditor or administrator in a fiduciary capacity.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G"}},"ancestry":[{"id":51809,"edition_id":2,"name":"Guaranteed Asset Protection Waivers","identifier":"64","label":"chapter","depth":2,"order_by":38,"parent_id":51644,"metadata":{"child_laws":8,"child_structures":0},"date_created":"2026-08-02 02:49:13","date_modified":"2026-08-02 12:33:16","permalink":{"id":1445313,"object_type":"structure","relational_id":51809,"identifier":"64","token":"38.2\/64","url":"\/38.2\/64\/","edition_id":2,"permalink":0,"preferred":1}},{"id":51644,"edition_id":2,"name":"Insurance","identifier":"38.2","label":"title","depth":1,"order_by":88,"parent_id":null,"metadata":{"child_laws":1890,"child_structures":173},"date_created":"2026-08-02 02:45:30","date_modified":"2026-08-02 12:32:55","permalink":{"id":1437663,"object_type":"structure","relational_id":51644,"identifier":"38.2","token":"38.2","url":"\/38.2\/","edition_id":2,"permalink":0,"preferred":1}}],"structure_contents":[{"id":362951,"structure_id":51809,"section_number":"38.2-6400","catch_line":"Definitions","url":"\/38.2-6400\/","token":"38.2\/64\/38.2-6400","metadata":false},{"id":362952,"structure_id":51809,"section_number":"38.2-6401","catch_line":"Requirements for offering guaranteed asset protection waivers","url":"\/38.2-6401\/","token":"38.2\/64\/38.2-6401","metadata":false},{"id":362953,"structure_id":51809,"section_number":"38.2-6402","catch_line":"Contractual liability or other insurance policies","url":"\/38.2-6402\/","token":"38.2\/64\/38.2-6402","metadata":false},{"id":362954,"structure_id":51809,"section_number":"38.2-6403","catch_line":"Disclosures","url":"\/38.2-6403\/","token":"38.2\/64\/38.2-6403","metadata":false},{"id":362955,"structure_id":51809,"section_number":"38.2-6404","catch_line":"Cancellation","url":"\/38.2-6404\/","token":"38.2\/64\/38.2-6404","metadata":false},{"id":362956,"structure_id":51809,"section_number":"38.2-6405","catch_line":"Commercial transactions","url":"\/38.2-6405\/","token":"38.2\/64\/38.2-6405","metadata":false},{"id":362957,"structure_id":51809,"section_number":"38.2-6406","catch_line":"GAP waivers not insurance","url":"\/38.2-6406\/","token":"38.2\/64\/38.2-6406","metadata":false},{"id":362958,"structure_id":51809,"section_number":"38.2-6407","catch_line":"Exemptions from chapter","url":"\/38.2-6407\/","token":"38.2\/64\/38.2-6407","metadata":false}],"previous_section":{"id":362951,"structure_id":51809,"section_number":"38.2-6400","catch_line":"Definitions","url":"\/38.2-6400\/","token":"38.2\/64\/38.2-6400","metadata":false},"next_section":{"id":362953,"structure_id":51809,"section_number":"38.2-6402","catch_line":"Contractual liability or other insurance policies","url":"\/38.2-6402\/","token":"38.2\/64\/38.2-6402","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-6401\/","history_text":"

This law was first created in 2019. The record of its establishment is cataloged in chapters 799<\/a> and 800<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year.<\/p>","references":[{"id":362956,"section_number":"38.2-6405","catch_line":"Commercial transactions","order_by":null,"url":"\/38.2-6405\/"}],"refers_to":[{"id":362953,"section_number":"38.2-6402","catch_line":"Contractual liability or other insurance policies","order_by":null,"url":"\/38.2-6402\/"}],"permalink":{"id":1445319,"object_type":"law","relational_id":362952,"identifier":"38.2-6401","token":"38.2\/64\/38.2-6401","url":"\/38.2-6401\/","edition_id":2,"permalink":0,"preferred":1},"url":"\/38.2-6401\/","token":"38.2\/64\/38.2-6401","dublin_core":{"Title":"Requirements for offering guaranteed asset protection waivers","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-6401","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Guaranteed asset protection waivers<\/span> may be offered, sold, or provided to borrowers<\/span> in the Commonwealth in compliance with this chapter. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> GAP waivers<\/span> may, at the option of the creditor<\/span>, be sold for a single payment or may be offered with a monthly or periodic payment option. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Notwithstanding any other provision of law<\/span>, any cost to the borrower<\/span> for a GAP waiver<\/span> entered into in compliance with the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq., and its implementing regulations, as they may be amended from time to time, shall be separately stated and shall not be considered a finance charge or interest. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> A retail seller<\/span> shall insure its GAP waiver<\/span> obligations under a contractual liability or other insurance<\/span> policy issued by an insurer<\/span>. A creditor<\/span>, other than a retail seller<\/span>, may insure its GAP waiver<\/span> obligations under a contractual liability policy or other policy issued by an insurer<\/span> as provided in § 38.2-6402<\/a>. Any such insurance<\/span> policy may be directly obtained by a creditor<\/span> or retail seller<\/span> or may be procured by an administrator<\/span> to cover a creditor<\/span>’s or retail seller<\/span>’s obligations. However, retail sellers<\/span> that are lessors on motor vehicles<\/span> are not required to insure obligations related to GAP waivers<\/span> on the leased vehicles. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The GAP waiver<\/span> shall remain a part of the finance agreement<\/span> upon the assignment, sale, or transfer of the finance agreement<\/span> by the creditor<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> Neither the extension of credit, the term of credit, nor the term of the related motor vehicle<\/span> sale or lease may be conditioned upon the purchase of a GAP waiver<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> Any creditor<\/span> that offers a GAP waiver<\/span> shall report the sale of GAP waivers<\/span> and shall forward funds received on all GAP waivers<\/span> to the designated party<\/span>, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance<\/span> policy, or other specified program documents. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> Funds received or held by a creditor<\/span> or administrator<\/span> and belonging to an insurer<\/span>, creditor<\/span>, or administrator<\/span> pursuant to the terms of a written agreement shall be held by the creditor<\/span> or administrator<\/span> in a fiduciary capacity. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nREQUIREMENTS FOR OFFERING GUARANTEED ASSET PROTECTION WAIVERS (\u00a7 38.2-6401)\n\nA. Guaranteed asset protection waivers may be offered, sold, or provided to\nborrowers in the Commonwealth in compliance with this chapter.\n\nB. GAP waivers may, at the option of the creditor, be sold for a single payment\nor may be offered with a monthly or periodic payment option.\n\nC. Notwithstanding any other provision of law, any cost to the borrower for a\nGAP waiver entered into in compliance with the federal Truth in Lending Act, 15\nU.S.C. § 1601 et seq., and its implementing regulations, as they may be\namended from time to time, shall be separately stated and shall not be\nconsidered a finance charge or interest.\n\nD. A retail seller shall insure its GAP waiver obligations under a contractual\nliability or other insurance policy issued by an insurer. A creditor, other than\na retail seller, may insure its GAP waiver obligations under a contractual\nliability policy or other policy issued by an insurer as provided in §\n38.2-6402. Any such insurance policy may be directly obtained by a creditor or\nretail seller or may be procured by an administrator to cover a creditor’s\nor retail seller’s obligations. However, retail sellers that are lessors\non motor vehicles are not required to insure obligations related to GAP waivers\non the leased vehicles.\n\nE. The GAP waiver shall remain a part of the finance agreement upon the\nassignment, sale, or transfer of the finance agreement by the creditor.\n\nF. Neither the extension of credit, the term of credit, nor the term of the\nrelated motor vehicle sale or lease may be conditioned upon the purchase of a\nGAP waiver.\n\nG. Any creditor that offers a GAP waiver shall report the sale of GAP waivers\nand shall forward funds received on all GAP waivers to the designated party, if\nany, as prescribed in any applicable administrative services agreement,\ncontractual liability policy, other insurance policy, or other specified program\ndocuments.\n\nH. Funds received or held by a creditor or administrator and belonging to an\ninsurer, creditor, or administrator pursuant to the terms of a written agreement\nshall be held by the creditor or administrator in a fiduciary capacity.\n\nHISTORY: 2019, cc. 799, 800.","edition":{"id":2,"name":"2026","slug":"2026","date_created":"2026-07-16 18:40:23","date_modified":"2026-08-02 15:14:36","current":1,"order_by":2,"last_import":"2026-08-02 12:37:30"}}