A recent disclosure involving scandal-plagued Wells ­Fargo bank underlines how important it is to pay close attention to the fine print of auto insurance coverage.

The disclosure involves “guaranteed asset protection” (GAP) insurance, which Wells Fargo and other lenders sell aggressively through dealerships when consumers take out car loans. Because the vehicle quickly loses much of its value, GAP insurance is meant to compensate lenders for that diminished value if the vehicle is totaled, stolen or repossessed. Wells Fargo charges a onetime fee of $500 to $700. In nine states—Alabama, Colorado, Indiana, Iowa, Maryland, Massachusetts, Oklahoma, Oregon and South Carolina—when borrowers pay off the loan early, lenders are required by law to refund part of the fee.

Wells Fargo has reportedly come under regulatory scrutiny for failing to refund GAP insurance fees to many consumers whose auto loans were paid off early.

If you are paying off a vehicle loan early in one of those nine states and are ­having trouble getting a GAP refund, contact your state insurance commissioner.

If you don’t have GAP insurance ­coverage, which is not required by law in any state and can’t be forced on you by a lender, you don’t need it. Here’s why…

In the unlikely event that you suffer a total loss of your vehicle during the life of your loan, your insurer will always pay the current value of the vehicle at that time. If you can’t afford to buy a new vehicle for the original price of the lost vehicle and pay off the remaining loan balance, you could buy a less expensive new or used vehicle and take out a new loan.

Example: Your new $20,000 car is totaled in an accident…your insurer covers $18,000, reflecting the current value…you buy a used car with a similar number of miles for no more than $18,000 and you still owe the same total of $20,000.

Also, if you shop around, you can get a variation on GAP coverage without an extra fee. Example: Car loans from State Farm Bank automatically come with a Payoff Protector provision.

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