361-D:9 Total Loss Notice and Waiver of Gap Amount. –
I. If the lease provides that the lessee shall be responsible for the gap amount, the lease shall disclose that fact and disclose the obligations for which the lessee would remain liable in the event of a total loss of the vehicle prior to the end of the lease term occasioned by its theft, physical damage or other occurrences as specified in the lease, using the term "gap amount".
II. The lessor may waive its contractual right to hold the lessee liable for some or all of the gap amount. This waiver may be granted either without a separate charge to the lessee, or in exchange for the payment by the lessee of a separate charge. Any separate charge for such waiver must be conspicuously disclosed to the lessee.
III. If the lessor, as provided in paragraph II of this section, offers for a separately stated charge to waive its contractual right to hold the lessee liable for the gap amount, the lease shall also contain a conspicuous notice which shall state in at least 8-point bold face type that:
(a) For a separate charge disclosed in the notice the lessor shall waive its contractual right to hold the lessee liable for the gap amount.
(b) The lessee may as an alternative to purchasing a waiver, be able to purchase protection covering the gap amount from a company which has been authorized to do business in this state.
(c) Failure to provide the notice as required by this section shall invalidate any lease provision which otherwise would obligate a lessee to pay to the holder, after a total loss of the vehicle occasioned by its theft, physical damage or other occurrence as specified in the lease.
(d) No lease shall be conditioned upon the lessee's obtaining of vehicle lessee gap protection.
IV. The lessor's waiver of its contractual right to hold the lessee liable for the gap amount may be conditioned upon the receipt by the lessor of:
(a) All amounts due under the lease as of the date of receipt by the lessor of the insurance proceeds or equivalent amount of the value of the vehicle, or if no such date is specified, as of the date of total loss of the vehicle.
(b) An amount from the lessee equal to the amount of the lessee's deductible and any other subtractions from the actual cash value under the lessee's insurance policy.
(c) Insurance proceeds from the insurance policy required under the lease, or the equivalent amount of the value of the vehicle established by reference to an official used car guide publication as of the date of the loss.
V. The lessor's waiver of its right to hold the lessee liable for the gap amount shall not be deemed to be insurance under the laws of this state and no license shall be required of lessors who waive or offer to waive such right.
VI. [Repealed.]
Source. 1996, 85:1. 1997, 322:28, IV, eff. June 23, 1997.