Does State Farm Provide Gap Insurance?

Having car insurance is essential for most drivers, but many of us don’t know what gap insurance is and why it’s important. Gap insurance, which stands for Guaranteed Auto Protection, is a type of coverage that pays the difference between the actual cash value of your vehicle and the amount that you owe on the loan or lease. It’s especially important if you’re financing your car and you have an accident or it’s stolen.

What is Gap Insurance?

Gap insurance is an optional type of coverage that can be added on to an existing auto insurance policy. It’s designed to cover the difference between the actual cash value of a vehicle and the amount that the owner owes on the loan or lease. It’s important to understand that gap insurance only applies to financed or leased vehicles, not ones that are owned outright.

When a vehicle is totaled in an accident or stolen, the insurance company will only pay out the actual cash value of the vehicle, not the amount that is still owed on the loan. This means that if the car is worth less than what is still owed, the owner is on the hook for the remaining balance. Gap insurance covers this difference, so the owner is not responsible for making the payments.

Does State Farm Offer Gap Insurance?

Yes, State Farm does offer gap insurance. State Farm gap insurance can be added to any existing auto policy, and it can be used to cover the difference between the actual cash value of the car and the amount that is still owed on the loan. It’s important to note that gap insurance from State Farm is only available for financed or leased vehicles, not ones that are paid off.

How Much Does State Farm Gap Insurance Cost?

The cost of gap insurance from State Farm depends on the value of the vehicle and the amount that is still owed on the loan. Generally speaking, State Farm gap insurance costs between 3% and 5% of the amount that is still owed on the loan. For example, if you owe $10,000 on your loan, the gap insurance could cost anywhere from $300 to $500 per year.

Conclusion

Gap insurance is an important type of coverage that can help protect you if your car is totaled in an accident or stolen. It pays the difference between the actual cash value of your vehicle and the amount that you owe on the loan or lease. State Farm does offer gap insurance, and the cost of the coverage depends on the value of the vehicle and the amount that is still owed on the loan.