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Updated June 15, 2022
Gap Insurance in Alabama
Often, Alabama drivers will use an auto loan or participate in a leasing program to purchase a car. Gap insurance provides financial protection in the event of your leased car being totaled by covering the remaining costs of a car loan or lease. For drivers looking for cheap gap insurance, Insurify offers an easy-to-use platform where you can compare multiple quotes within a matter of minutes.
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Best Companies for Gap Insurance in Alabama
If you are planning on leasing a new vehicle and need to purchase an auto insurance policy like gap insurance, you should consider getting quotes from the following Alabama insurance providers.
|Insurance Company||Average Monthly Cost for Leased Cars in Alabama|
|Midvale Home & Auto||$229|
See More: Cheap Car Insurance in Alabama
What is gap insurance?
Gap insurance, which stands for guaranteed asset protection, is optional insurance coverage that financially helps cover the gap left between a vehicle’s actual value and any remaining balances on a loan or lease if the car is stolen or totaled in an accident. Drivers who don’t have this protection could be forced to pay the difference—which can amount to tens of thousands of dollars—out of pocket.
While there isn’t a state law in Alabama that says you must carry gap insurance, your lender will most likely require you to purchase the coverage. This guarantees that a loan or lease will be paid off, even if your vehicle is involved in an accident and deemed a total loss.
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Who should buy gap insurance in Alabama?
When it comes to buying gap insurance in Alabama, four different groups of people should consider purchasing a policy. These groups consist of:
Those who have leased their car or truck through a dealership
Those who made a down payment of 20 percent or less when purchasing their vehicle
Those with an auto loan that will last longer than five years
Those with a car that depreciates faster than others
Alabama Gap Insurance Laws
In Alabama, standard auto insurance coverage is required, but having a gap insurance policy is not. Instead, the lenders who provide financing often require drivers to purchase the additional coverage. You will want to speak with your financial institution to see if they need you to have gap insurance.
How much gap insurance do I need in Alabama?
Every situation is different, and the exact amount of gap insurance you need could differ from what another driver might need. With this in mind, it is essential to review gap insurance quotes carefully before making a decision. Some policies pay up to only 25 percent of a car’s value instead of the entire remaining loan balance. This could still leave you paying out of pocket.
Other insurance companies or lenders will provide gap coverage options that pay off the entire balance of the loan regardless of how much is left over. While these plans may be a little more costly, they can save you thousands of dollars if you ever need the coverage.
Ultimately, the only way to know which option is best for you is to shop around and compare multiple quotes.
See More: How Much Car Insurance Do I Need?
How Gap Insurance Works in Alabama
In Alabama, gap insurance is a car insurance coverage option that pays for the gap between a car’s value and any remaining balance on a lease or loan. Should your vehicle be stolen or totaled in an accident, gap insurance will help you pay off some or all of your auto loan or lease.
Unlike other auto insurance products like comprehensive coverage, liability coverage, or bodily injury liability coverage, gap insurance has a unique feature. If you pay your premiums in advance and pay off your vehicle loan early, you may receive money back.
How Much Gap Insurance Costs in Alabama
How much is gap insurance in Alabama?
The average cost to insure a leased vehicle in Alabama is $242 per month. However, what you pay for gap insurance will largely depend on whether you buy gap insurance from your car dealership or from your insurance provider.
Many factors could play a role in determining how much you pay each month for gap insurance, including:
Vehicle’s actual cash value
Claims history for a vehicle
However, most drivers in Alabama can expect to pay about $242 per month for car insurance that includes a gap insurance policy.
See More: Average Cost of Car Insurance in Alabama
How to Buy Gap Insurance in Alabama
If you are a driver who needs gap insurance, there are several ways to obtain coverage in Alabama. The three most common places to get guaranteed asset protection are a car dealership, a lender, and an insurance company. Since all three offer different rates and policies, it is essential to compare quotes before purchasing a plan.
A platform like Insurify makes the process of reviewing multiple quotes much easier and allows drivers to compare policies within seconds on a single page. Finding cheap gap car insurance rates has never been easier.
Frequently Asked Questions: Gap Insurance in Alabama
Alabama drivers aren’t legally required to carry gap insurance by the state. However, motorists planning on taking out a loan or leasing their next vehicle may be required to purchase gap insurance by their lender. You will want to speak with the lending company about their specific requirements.
Drivers in the state of Alabama who have gap insurance may be able to get money back. Generally, this is only the case if you pay your insurance policy in advance and pay off your vehicle early. Those who are currently paying monthly premiums for their gap coverage aren’t eligible to get money back.
Finding the right insurance company to purchase cheap gap insurance from can be difficult. Several Alabama car insurance companies offer the coverage, making it hard to compare quotes. Insurify simplifies the process by providing drivers with a list of quotes on a single page, making it easier to find the right coverage quickly.
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Data scientists at Insurify analyzed over 40 million auto insurance rates 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. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.