Gap Insurance is

Guaranteed Asset Protection coverage also simply known as “Gap insurance” is a type of supplemental auto insurance that protects you if your vehicle is stolen or declared a total loss. When your loan balance exceeds the value of your vehicle, gap insurance pays the difference. If your car is damaged, stolen, or declared a complete loss, Gap can help you cover the difference between your insurance coverage and your loan balance. It’s not always required to get gap insurance, but it might come in useful.

Gap Insurance Through Dealership

There are a number of additional costs you may be asked to pay when finalizing your auto purchase with a dealership representative . The question, “Should I acquire gap insurance from the dealer?” should be reconsidered. Gap insurance can be purchased from a variety of sources, including the dealership or lender who is financing your vehicle, or directly from an auto insurance provider. It is often more expensive to purchase gap insurance through the dealership or lender rather than via your car insurance policy.

When you buy a new car, you don’t have to get gap insurance from your dealer. Typically, you may add gap coverage to your new vehicle right away. Inquire with your agent about time constraints and needs so that you can plan accordingly.

Gap Insurance On Car Loan

The only way to get gap insurance is if you took out a loan to buy your car or if you leased it. You don’t need gap insurance if you own your car outright. You only need gap coverage if your car’s worth is less than the amount of money you owe. Finding the car’s cash value and subtracting it from your loan balance is the easiest approach to see if you need gap insurance.

Lease Gap Insurance

Leased cars depreciate fast, just like any other car or SUV. The reason for this is that you will presumably owe more than the car is valued in the event of an accident because you did not put enough money down. Gap insurance for your lease may be a sensible financial move in this circumstance. The overall cost of the lease—including taxes and any other fees you bundled into the deal—should be compared to the vehicle’s MSRP to see whether there is a discrepancy.

As you begin to make payments and the car depreciates, the gap between what you owe and the vehicle’s value narrows. As a result, you may not need coverage for the whole length of the lease. How long you’ll be using the rental may be specified in your contract.

Companies With The Best Gap Insurance

1. Progressive: Progressive only covers 25% of the ACV. Gap insurance can be added to an existing policy for as low as $5 monthly.
2. AAA: American Automobile Association covers the gap for fully insured vehicles. Your insurer will waive your deductible up to $1,000 if your car is totaled.
3. Esurance: Esurance and other auto insurers call this coverage “gap insurance.” Automobile leasers and borrowers may be covered.
4. USAA: Military soldiers and their families can get USAA auto insurance. If you have a $5,000 automobile loan and your car is under 7 years old, USAA offers Total Loss It has a $1,000 deductible.
5. State Farm: State Farm does not provide Gap insurance, but instead offers what is known as a Payoff Protector. Any driver that’s eligible for a State Farm bank auto loan can qualify. The Payoff Protector only applies to full coverage auto insurance supplied by any company. Payoff Protector can be included in the cost of other auto insurance companies, meaning your policy can be provided from another carrier, as long as your loan is from State Farm Bank.
6. Allstate: It waives the gap between a primary auto insurance settlement and the remaining car debt. It reimburses the deductible and covers damages up to $50,000. Insurers deduct the deductible from your claim payment.
7. Nationwide: When it comes to complete loss coverage, Nationwide does not waive your deductible.