Gap Insurance in Virginia (2024)

Gap insurance gives your wallet extra protection when you finance or lease your vehicle. But the optional coverage comes at a cost.

Sarah Sharkey
Written bySarah Sharkey
Sarah Sharkey
Sarah SharkeyInsurance Writer
  • 7+ years writing insurance and personal finance content

  • Contributor to top media, including USA Today

A passionate personal finance advocate, Sarah’s writing has graced the pages of many of the personal finance and insurance industries’ top web publications.

Featured in

media logomedia logomedia logo
Chris Schafer
Edited byChris Schafer
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

Featured in

media logomedia logomedia logomedia logo

Updated July 17, 2023

Save up to $717 by comparing quotes from the top 100+ insurance companies

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
Shopper Approved
ProgressiveLiberty MutualTravelers
Advertiser Disclosure

At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.

We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.

Why you can trust Insurify: Comparing accurate insurance quotes should never put you at risk of spam. We earn an agent commission only if you buy a policy based on our quotes. Our editorial team follows a rigorous set of editorial standards and operates independently from our insurance partners. Learn more.

When you drive a vehicle off the lot, it immediately starts to depreciate in value. No one enjoys watching their vehicle’s value decline, and this creates a significant financial risk for drivers who financed or leased their vehicles. Suddenly, you may owe more on the vehicle than it’s worth, and if you’re in an accident, you may be left with a bill and no vehicle.

Gap insurance mitigates this risk of financial loss after an accident for drivers with a financed vehicle. If you plan to finance or lease a vehicle, gap insurance might be a useful addition to your car insurance policy.

Quick Facts
  • Gap insurance covers the difference between your vehicle’s current value and your remaining loan balance.

  • Without gap insurance, you’ll be on the hook for the remaining loan balance if the car is totaled.

  • Getting gap insurance will add to your auto insurance premium costs.

Find Cheap Gap Insurance in Virginia

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
Shopper Approved
ProgressiveLiberty MutualTravelers

What is gap insurance, and how does it work?

A new car loses value quickly. As a general rule, a new vehicle will lose approximately 20% of its value in the first year. Within five years on the road, new vehicles tend to lose around 60% of their original value.[1]

Even if you purchase full-coverage car insurance, which your lender will likely require, that policy only covers the current market value of the vehicle.[2] But your outstanding loan balance, based on the vehicle’s initial value, may be higher than the car’s current value. The mismatch of numbers leads to a gap in your car insurance coverage.

Important Information

Gap insurance, or guaranteed asset protection insurance, is an optional coverage to protect you from having to pay off a totaled vehicle on your own. Instead, the insurance company will help cover the difference.

What does gap insurance cover in Virginia?

Gap insurance covers the difference between the vehicle’s current market value and your outstanding loan amount. After an accident, you’ll be able to pay off the remaining loan balance with the help of your gap insurance policy.

For example, let’s say you get into an accident that totals your vehicle. And your full-coverage policy will pay up to the current market value of $15,000. However, your outstanding loan balance is $20,000. You’ll still be responsible for $5,000 unless you carry gap insurance.

In Virginia, the lender or dealer may offer gap insurance to drivers who finance or lease their vehicles.[3] But you’ll also have the opportunity to shop around for this coverage on your own.

Gap insurance vs. full coverage

Full-coverage car insurance goes beyond liability coverage to include comprehensive coverage and collision coverage. When your vehicle is damaged, a full-coverage policy will help you repair or replace your vehicle. But the policy limit is usually capped at the vehicle’s current cash value.[2]

Gap insurance isn’t included in full-coverage policies. Instead, gap insurance is an optional coverage that you can add to your policy to protect against expenses after a total loss.

Find Cheap Gap Insurance in Virginia

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
Shopper Approved
ProgressiveLiberty MutualTravelers

Who needs gap insurance in Virginia?

Good to know

Here are some situations when purchasing gap insurance might make sense:

  • You made a down payment of less than 20% on the vehicle purchase.

  • You financed the vehicle for a loan term of more than 60 months.

  • Your vehicle will depreciate faster than the average car.

  • Your new car loan amount includes negative equity from a previous car loan.

Of course, not everyone needs gap insurance. If you own your vehicle outright or can comfortably cover the gap in the event of an emergency, this coverage probably isn’t for you.

How to buy gap insurance in Virginia

If you decide you want to carry gap insurance, you can purchase it from a variety of sources. You can purchase gap insurance from a regular insurance company, and you may also be able to purchase it from your lender or the dealership.

In general, it’s usually more affordable to purchase gap insurance from an auto insurance company.

If you purchase it from your insurer, you can usually add this coverage to your existing policy. Most insurers require you to carry comprehensive and collision coverage as a baseline before adding gap coverage. But you’ll have the option to drop the coverage at any time.

As you look for gap coverage, remember to shop around. If you don’t compare quotes from multiple companies, you’ll likely overpay.

How much does gap insurance cost in Virginia?

Gap insurance is priced differently from a car insurance policy in that it doesn’t have deductibles or policy limits to decide between. People who enroll in this protection are guaranteed coverage that bridges the difference between what their insurance pays and their loan payoff amount in the event of a total loss.

Best gap insurance companies in Virginia

The best gap insurance companies in Virginia strike a balance between affordable rates, high customer satisfaction, and a stable financial position. Here’s a closer look at some of the top options to consider.

American Family

American Family offers gap coverage as an add-on to auto insurance policies. While you might not lock in the lowest possible rate, the company offers a smooth customer service experience that might be worth the cost.

Erie Insurance

Erie Insurance offers an Auto Security endorsement, which includes gap coverage and extra help with replacing a totaled vehicle. The company earned high marks in J.D. Power’s 2022 Auto Claims Satisfaction Study and is known to offer affordable rates.[4]

Kemper Preferred

Kemper offers gap insurance under the name “auto loan/lease coverage” and is known for catering to high-risk drivers. It’s likely you’ll find reasonable price points. However, the company doesn’t have a great customer service reputation.[4]

Travelers

Travelers scored about average across regions in J.D. Power’s 2022 Auto Insurance Study, which means you can expect a reasonably good experience.[4] With a wide range of coverage options, Travelers lets you build a policy that suits your needs.

USAA

USAA offers gap insurance under the title of “total loss protection.” The company is known for offering reasonable rates, a suite of discounts, and top-notch customer service. But you’ll only be able to work with USAA if you’re a veteran, military member, or a family member of one.

How Insurify rates car insurance companies

Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page.

The car insurance data includes coverage analysis and details on drivers’ vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.

With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums. The data included on this page represent averages across all ages, genders, credit scores, and driver profiles for Virginia drivers.

Virginia gap insurance FAQs

If you’re looking for gap insurance in Virginia, this additional information may help as you research your coverage options.

  • Does Virginia require gap insurance?

    No. The Commonwealth of Virginia doesn’t require drivers to carry gap insurance.[5] Although this type of insurance coverage isn’t required by law, it can be a useful way to protect your financial interests. If your vehicle’s current value is less than your remaining vehicle loan balance, gap insurance is worth considering.

  • What are the cons of gap insurance?

    The major disadvantage of gap insurance is that you’ll face higher auto insurance premiums when you add this optional coverage. However, while you’ll pay more for your auto insurance, you’ll also have more financial protection.

  • When can you cancel gap insurance?

    You can cancel gap insurance at any time by letting your insurer know. Once your car’s value is higher than the remaining loan balance, it makes sense to cancel your gap coverage. But even if your vehicle’s market value is less than the remaining loan balance, you have the option of canceling your gap coverage.

  • Do you need gap insurance for a leased car?

    When you lease a vehicle, you may need to purchase gap insurance. In fact, some lessors require drivers to carry gap insurance on the vehicle. But even if the lessor doesn’t require you to carry it, gap insurance still offers important financial protection. If you’re leasing a vehicle, gap insurance covers the difference between the car’s market value and what you owe on the lease.

  • Can you buy gap insurance after you’ve already purchased a car?

    Yes. It’s usually possible to purchase gap insurance on a vehicle you’ve already purchased. The catch is that your vehicle’s market value must be less than the remaining loan balance. However, some insurance companies may limit when you can purchase this coverage.

Sources

  1. Kelly Blue Book. "How to Beat Car Depreciation."
  2. Insurance Information Institute. "What is auto insurance?."
  3. Virginia State Law Portal. "Requirements for offering guaranteed asset protection waivers.."
  4. J.D. Power. "Usage-Based Auto Insurance Takes Center Stage as Satisfaction Flatlines, J.D. Power Finds."
  5. Virginia DMV. "Insurance Requirements."
Sarah Sharkey
Sarah SharkeyInsurance Writer

Sarah Sharkey is a personal finance writer who enjoys helping people make savvy financial decisions. She covered insurance and personal finance topics. You can find her work on Business Insider, Money Under 30, Rocket Mortgage, Bankrate, and more. Connect with her on LinkedIn.

Chris Schafer
Edited byChris SchaferSenior Editor
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

Featured in

media logomedia logomedia logomedia logo

Compare Car Insurance Quotes Instantly

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
Shopper Approved
ProgressiveLiberty MutualTravelers

Latest Articles

View all