HB 1181 Summary

• Creates Chapter 26.1-57 of North Dakota Century Code to regulate guaranteed asset protection (GAP) waivers for motor vehicles, which cancel or waive amounts owed if a vehicle is totally damaged or stolen.

• Establishes that GAP waivers are not insurance and are exempt from state insurance laws when offered in compliance with this chapter, though dealers and creditors may obtain contractual liability insurance to cover their waiver obligations.

• Requires GAP waivers to include a minimum 30-day free-look period allowing borrowers to cancel without penalty and receive full refunds, with cancellations after this period limited to a $50 maximum fee and calculated using the sum-of-digits method.

• Mandates clear written disclosures to borrowers including purchase price, terms, protection requirements, cancellation procedures, refund methodology, and confirmation that credit extension cannot be conditioned on waiver purchase.

• Provides enforcement authority to the commissioner to order cease and desist, impose penalties up to $500 per violation ($10,000 aggregate for similar violations), and order restitution of waiver purchase prices.