Which Auto Insurance Companies Offer GAP Insurance?
Insurance with GAP coverage protects the policyholder for the difference between the value of the vehicle and the remaining balance of the loan or lease. GAP insurance only adds an average of $30 per month to your auto insurance premium. GAP insurance is offered by most auto insurance providers including Travelers, Progressive, Nationwide, and more.
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UPDATED: Dec 22, 2021
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- Not all auto insurance providers offer GAP insurance
- GAP insurance covers the difference between what a vehicle is currently worth and the amount one owes on it
- USAA, Travelers, and Progressive are among the highest-rated auto insurance providers for GAP or total-loss insurance coverage
GAP insurance or “guaranteed asset protection” is a form of optional auto insurance coverage that protects policyholders in the event they owe more money on a vehicle than what the vehicle is worth.
Many, but not all, auto insurance companies offer GAP insurance. Buyers have the option of purchasing GAP insurance through the dealership where the vehicle was purchased or financed.
Because GAP insurance is an optional coverage, you may wonder if GAP insurance is worth the extra cost. Typically, GAP insurance is a good idea for those who finance their vehicles. If you pay the entire purchase price for your vehicle up front, you don’t need GAP insurance.
Find auto insurance with GAP coverage in your area by entering your ZIP code in the free tool above.
What is GAP insurance?
According to the Insurance Information Institute, GAP insurance is the difference between what a vehicle is currently worth and the amount you still owe on it.
This type of coverage is used along with any collision or comprehensive coverage on your auto insurance policy. Collision and comprehensive coverage only protect a totaled or stolen vehicle up to its depreciated value.
GAP insurance steps in by covering the remainder of a vehicle’s cost when a collision or comprehensive coverage stops at the depreciated value. This is why GAP coverage only works for financed or leased vehicles.
A vehicle that is owned outright won’t have a remaining balance after comprehensive or collision insurance is applied to a claim. GAP insurance specifically covers the remaining balance of a loan or lease to the bank/loan provider or dealership.
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Auto Insurance with GAP Coverage
GAP insurance, also known as loan/lease GAP coverage, or total-loss-protection coverage, is offered by many standard auto insurance providers. Affordable car insurance with GAP coverage is available in several ways:
- From an auto insurance company
- A loan provider, or
- A dealership
GAP insurance purchased through an auto insurance company will typically increase your premium by at least $30 a year. The same coverage purchased through a dealership or loan provider can add at least $500 to your loan per year.
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Allstate: Insurance with GAP coverage rates from Allstate are approximately $20 per six-month period.
Liberty Mutual: Liberty Mutual GAP coverage ranges from $5 to $15 per month.
Nationwide: Nationwide provides GAP insurance coverage for vehicles that are six years old or newer.
Progressive: The average price of GAP insurance with Progressive is $5 per month. GAP insurance under Progressive will pay as much as 25% more than your car’s depreciated value.
Travelers: GAP insurance from Travelers can add approximately 5% to your comprehensive and collision premium.
USAA: USAA doesn’t have standard GAP insurance. Instead, USAA has Total Loss Protection coverage. Total Loss Protection is available only for customers who have an auto loan with USAA.
Is GAP insurance worth it?
GAP insurance is best for those who:
- Put less than a 20% down payment on the vehicle
- Have an auto loan longer than 60 months, or
GAP insurance can also be applied to businesses. Business insurance has several different coverage options that can be bundled to create the optimal package for business needs.
Businesses utilizing vehicles or fleets of vehicles or trucks may find GAP insurance handy, especially if the vehicles are financed.
Determining if GAP insurance is right for you depends on how much additional coverage you feel you may need.
If you have a long-term auto loan or lease, GAP insurance can offer extra protection and help you get the proper payout in the case of a total loss.
GAP insurance is offered with most auto insurance providers as well as car dealerships. Coverage through an auto insurance provider will only add an average of $30 to your premium per month. Some providers offer GAP as low as an additional $5 per month.
When your loan is fully paid or the balance owed is lower than the vehicle’s depreciated value, you can remove GAP insurance from your auto insurance policy.
Search insurance with GAP coverage quotes near you by typing your ZIP code in the free tool below.