Does State Farm Offer Gap Insurance?

Gap insurance is a type of auto insurance that covers the gap between the remaining balance on your car loan and the current market value of your car. Gap insurance is usually recommended for those who have a car loan and are concerned about their car depreciating faster than they can pay off the loan. But does State Farm offer gap insurance?

What is Gap Insurance?

Gap insurance is a type of insurance coverage that is designed to cover the difference between the amount that you owe on a loan for a car, and the actual cash value of the car. For example, if you financed a car for $20,000 and the car is worth $15,000 due to depreciation, you may be responsible for the remaining $5,000. Gap insurance will pay for the remaining debt, so you don't have to worry about it.

Gap insurance is most beneficial for those who are financing a new vehicle, since new cars tend to depreciate quickly. It also helps those who have a long loan duration, since the longer you have a loan on a car, the more it depreciates. That said, gap insurance isn't necessary for those who are leasing their vehicles, since the leasing company typically covers any difference between the loan balance and the market value of the car.

Does State Farm Offer Gap Insurance?

The answer is yes, State Farm does offer gap insurance. State Farm's gap insurance is known as "New Car Replacement Insurance" and is available for new cars and leased cars. This type of insurance covers the difference between the car's actual cash value and the original purchase price, up to a certain amount. The coverage limit is usually set at $30,000, so it can be a great option for those who have financed a more expensive vehicle.

The cost of State Farm's gap insurance varies depending on the make, model, and year of the car, as well as the amount of coverage. It's important to note that the cost of gap insurance is usually lower than other types of auto insurance, so it can be a great way to save money while still getting the coverage you need.

Conclusion

Gap insurance can be an invaluable asset for those who are financing a new car, since it can help protect them from having to pay a large amount of money out-of-pocket if their car depreciates faster than they can pay off the loan. Thankfully, State Farm does offer gap insurance, so those who are interested in this type of coverage can be sure that they're getting the protection they need.