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Here you will learn who offers gap insurance and how and where you can buy gap insurance. You’ll also get an overview of the different types of gap insurance and how they work.

Where to buy gap insurance?

Gap insurance providers include many major car insurance companies, as explained earlier.

In some cases when you are insuring a new car, you can get gap coverage as an add-on endorsement to your standard policy; check with your insurer to find out if it is offered. You must also have collision and comprehensive coverage on the policy.

You can also buy it from the dealership, or from your lender, and have it included as part of your car loan. Another option is to check with your bank or credit union.

How much gap insurance costs will depend on where you buy it – it is cheaper to buy from a standard carrier rather than from a bank or dealership. Progressive says it costs about $5 a month, or $60 a year, on average, though Esurance and the Insurance Information Institute say it is about $20 a year.

Buying gap insurance from a dealership means you’ll pay a hefty mark-up price, according to consumer advocacy groups. Dealerships’ average mark-up cost on gap insurance is about 150%, though in some cases it’s much higher – 38 dealers in one analysis were found to hike the price of gap insurance by an average of 300%, according to a National Consumer Law Center report.

Another option is to buy a stand-alone policy, though there are few companies that do this, GapDirect is one.

Gap insurance providers

You can buy gap insurance from most major car insurance companies, though there are some exceptions. Below is a list of gap insurance providers, and details of their offerings, based on a 2020 research report by CarInsurance.com Senior Consumer Analyst Penny Gusner.

  • AIG
  • AAA
  • Allstate
  • Ameriprise
  • American Family
  • Central Mutual
  • Chubb
  • CSAA Insurance Group
  • Esurance
  • MetLife
  • Mapfre
  • Nationwide
  • Plymouth Rock
  • Progressive
  • Safeco
  • State Farm
  • Travelers
  • USAA

Note however, that while Allstate gap insurance, Nationwide gap insurance and Progressive gap insurance and so on exist, in some instances it is actually called “loan/lease coverage.” They both do the same thing – covers the "gap" or difference, if any, between your car's actual cash value and what you still owe on it if it’s totaled, but loan/lease coverage can have more limitations. In other cases, gap insurance may be called something more catchy, though again, operates in the same or similar way. One example of this -- USAA gap insurance is called “Total Loss Protection” insurance.

Can I buy gap insurance online?

Yes, typically you can buy gap insurance online anywhere that you buy standard car insurance. You can also buy it online from stand-alone gap providers.

CarInsurance.com offers a number of different gap policy options. In each state where we are an online insurance agency and offer Safeco, Mapfre, Plymouth Rock, Travelers, Progressive, and The Hartford we offer loan/lease gap coverage along with your auto insurance policy. These policies are limited to the terms of your policy and must be purchased with comprehensive and collision. Depending on the insurer, sometimes gap coverage will cover your claim deductible. Typically, however, gap insurance only pays the difference between what is owed and the actual cash value of the car.

State Farm gap insurance: How Payoff Protector works

Does State Farm offer gap insurance? Yes, but with restrictions and by a different name. State Farm gap insurance is called “Payoff Protector,” and technically isn’t insurance coverage per se. Payoff Protector is available only to those who got their car loan from a State Farm bank, and it’s included automatically when you close on your car loan. If your vehicle is determined to be a total loss before the loan is paid off, State Farm Bank will cancel the difference between the insurance payout and the unpaid principal balance due on the loan.

Agreed value coverage gap insurance companies

“Agreed value” insurance is a type of coverage offered by some carriers that is similar to gap insurance – again, it accomplishes the same goal, but arrives at it a different way. Chubb and AIG offer agreed value plans. Under these plans, you and the insurance company determine the value of your vehicle when you buy your policy. If your car is totaled or stolen before its paid off, you'll receive that agreed-upon amount, regardless of market depreciation.

In general, agreed value policies have been for classical, antique or special vehicles, so it may not be available for your vehicle, thus check with the insurer to make sure your car is eligible if this is something you are eager to have on your vehicle.

Is there Geico gap insurance?

No, Geico does not offer gap insurance. If you have a Geico car insurance policy and want gap insurance, you can purchase stand-alone gap insurance from another insurer that sells it. If your insurer doesn’t offer gap insurance, you can look for stand-alone gap insurance providers. Or, another option is to buy gap insurance from the dealership where you bought your car, but it will cost much more than a coverage purchased by an insurance carrier.

Who provides stand along gap insurance?

Stand alone gap insurance is coverage that you buy independently from your existing car insurance policy. This differs from standard carrier gap insurance providers who require that you have comprehensive and collision coverage with them before selling you gap coverage.

GapDirect is a stand-alone gap insurance provider. It is a subsidiary of Western General, which caters to high-risk drivers. You can purchase a policy from the GapDirect website, where it says that it’s sold for just two- or three-year terms, the “critical” timeframe of your car loan. While a short-term policy may be cheaper than others, standard plans can be kept until you owe very little money on your loan, which means you get protection for a longer period of time. GapDirect’s terms of agreement also say that the maximum payout you get under its plan is $25,000.

Can you buy gap insurance at any time?

It depends on who you are buying coverage from.

Stand-alone coverage may let you buy at any time before a loss occurs, GapDirect does. But for others there can be a short time frame in which to buy gap insurance. Some car insurance companies require the vehicle to be brand new for you to be eligible for gap or lease/loan coverage.

The definition of brand new varies but typically with insurers means you are the original owner of the car and the vehicle is not older than two or three model years. Some insurers require you purchase the policy within 12 months of purchase of the vehicle.

If you believe you’ll be underwater, owe more than the car is worth, from the onset check for gap insurance in the early months so you don’t miss out.

Overview of how gap insurance works?

Below are standard terms for a gap policy, but remember the terms of loan/lease gap coverage will vary depending upon the guidelines of the issuing company:

  • Gap insurance is available if there is a leaseholder or lienholder on the vehicle. A lessor or lienholder can only be a financial institution; it cannot be a private individual.
  • Provides coverage when a vehicle sustains a total loss.
  • Covers the difference between the actual cash value (ACV) of the vehicle at the time of loss (less deductible) and the amount owed on the loan or lease.
  • Collision and comprehensive coverages required.
  • Payment will not include unpaid finance, excess mileage or any other charges or expenses associated with the loan or lease.
  • Typically will pay out anywhere from five to 45 days after the claim.