Auto Insurance That Offers Gap Coverage: A Comprehensive Guide

Gap insurance is an important type of coverage to consider if you are buying a new car. Gap insurance covers the gap between what you owe on the car and the amount of money your car insurer will pay out in the event of an accident. It's especially important if you are making a large down payment, have a loan with a high interest rate, or have a loan that has a longer repayment period. While most auto insurance policies do not include gap coverage, there are a few insurers that offer it.

What is Gap Insurance?

Gap insurance is a type of auto insurance coverage that pays for the difference between the amount you owe on a car and the amount your car insurer will pay out in the event of an accident or theft. For example, if you owe $20,000 on a car but your car insurer will only pay out $15,000 in the event of an accident, gap insurance will pay for the remaining $5,000. The purpose of gap insurance is to protect you from losing money in the event of an accident or theft.

Why Do I Need Gap Insurance?

Gap insurance is a great option for anyone who is making a large down payment or has a loan with a high interest rate. It is also important if you have a loan with a longer repayment period, as the value of a car can depreciate over time, meaning the car may not be worth what you owe on it. By having gap insurance, you are covered in the event of an accident or theft, so you don't have to worry about losing money.

How Much Does Gap Insurance Cost?

The cost of gap insurance varies from insurer to insurer, but generally it is relatively inexpensive. Depending on your situation, gap insurance can cost anywhere from $20 to $200 per year. It is usually a good idea to get quotes from several different insurers to make sure you are getting the best rate.

Where Can I Find Gap Insurance?

Gap insurance is offered by a few different auto insurance companies, including Allstate, Geico, Progressive, and State Farm. It is important to shop around and compare rates before choosing a company, as the cost of gap insurance can vary significantly from one provider to the next. You can also contact your current auto insurance provider to see if they offer gap insurance.

Conclusion

Gap insurance is an important type of coverage to consider when buying a car, especially if you are making a large down payment or have a loan with a high interest rate or longer repayment period. It is relatively inexpensive and can provide peace of mind in the event of an accident or theft. Gap insurance is offered by a few different auto insurance companies, so it is important to shop around and compare rates before choosing a provider.