Gap Insurance in Colorado (2024)
Gap insurance in Colorado can help if you total your financed or leased vehicle.
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Written byAnna Baluch
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4+ years writing insurance and personal finance content
MBA from Roosevelt University
Anna leverages her personal finance and insurance knowledge to create educational content that helps people make smart financial decisions.
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Edited byAshley Cox
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7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
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Updated November 20, 2024
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Table of contents
Gap insurance can help fill in the coverage gap between what you still owe on a financed or leased vehicle and the insurance payout following total vehicle loss due to an accident or theft.[1] Without this coverage, you risk draining your savings or having to use credit cards to pay for a loan or lease on an unusable vehicle.
Some major insurance companies don’t offer this coverage. When shopping around for auto insurance quotes, always consider what coverage you need for your vehicle.
Here’s what you need to know about gap insurance in Colorado.
Quick Facts
Gap insurance is an optional car insurance policy that you can buy through a car dealership or auto insurance company as a stand-alone or add-on policy.
Though Colorado doesn’t require gap coverage, it’s a good idea if you want extra financial protection for a leased or financed vehicle.
Per Colorado law, insurance companies or dealerships can’t charge gap insurance buyers a gap fee exceeding $600 or 4% of the car loan amount, whichever is higher.[2]
How gap insurance works
Gap insurance is an optional auto insurance coverage that can provide financial protection after a total loss or theft. It can cover the “gap,” or the difference between the current value of your car and your loan or lease balance after you pay the deductible.
To qualify for gap insurance, you’ll need collision and comprehensive coverage — both of which are part of a full-coverage policy for your vehicle.
What gap insurance covers in Colorado
In Colorado, gap insurance pays the remaining amount on your car loan or lease after a total vehicle loss if your insurance settlement amount doesn’t cover your remaining balance.
For example, let’s say your insurer considers your car a total loss after an accident, you have a remaining auto loan balance of $25,000 on your auto loan, and an insurance adjuster determines the fair market value of the car is $20,000.
After you pay your $1,000 deductible, you’re left with a standard insurance payout from your collision insurance of $19,000. Your gap insurance could then cover the remaining $6,000 you owe on your auto loan. Otherwise, you’ll have to pay the remaining balance out of pocket.
Keep in Mind
Gap insurance might not cover excess mileage charges, late fees, or additional charges related to your loan. It also won’t pay for extended warranties or property damage or injuries after an accident.
Best gap insurance companies in Colorado
To help you find a gap insurance policy, consider the following three reputable car insurance companies that offer affordable coverage in Colorado.
American Family
| User Reviews | 4.5 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9.1 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $63/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $134/mo |
4.5
Best choiceBased on 386 verified guest reviews and ratings
How drivers feel about American Family
Drivers appreciate the responsive customer service and reliability but dislike the high prices and frequent rate increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Outstanding customer service
Flexible coverage options
Families with young drivers
How drivers feel about American Family
Drivers appreciate the responsive customer service and reliability but dislike the high prices and frequent rate increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Outstanding customer service
Flexible coverage options
Families with young drivers
Reviews (207)
Stephanie
November 5, 2024
Verified Review
It started out okay. My six-month policy was over and immediately, I received a rate hike of 124 dollars. I question why this is the case as I am an excellent driver. I'm tired of feeling punished for the actions of other irresponsible drivers. Additionally, I was informed that my insurance will continue to increase and they don't foresee any changes soon. It's not something I'm looking forward to. Thanks!
It started out okay. My six-month policy was over and immediately, I received a rate hike of 124 dollars. I question why this is the case as I am an excellent driver. I'm tired of feeling punished for the actions of other irresponsible drivers. Additionally, I was informed that my insurance will continue to increase and they don't foresee any changes soon. It's not something I'm looking forward to. Thanks!
Devona
November 5, 2024
Verified Review
Line by Line to Save Money
Go through every line item with your agent!
Joseph
November 4, 2024
Verified Review
Looking for Better
Beware of renewal periods, as American Family increases the premium amount at every renewal stage, even without you having any claims or violations.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
840NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.3A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
AWhy we picked this company
American Family lets you enroll in a gap insurance policy as an add-on to your standard policy. You can get a quote online on the website or mobile app after you provide your contact information and financial information.
Pros
Above-average J.D. Power claims satisfaction rating
Numerous discount and coverage options
Cons
Available in only 18 states
Not the cheapest rates compared to other insurers
Nationwide
| User Reviews | 4.4 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 8.7 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $76/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $161/mo |
4.4
Best choiceBased on 782 verified guest reviews and ratings
How drivers feel about Nationwide
Drivers appreciate the excellent coverage, reliable claims process, and good initial rates but dislike the frequent price increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Usage-based savings
Accident forgiveness
Recreational vehicle coverage
How drivers feel about Nationwide
Drivers appreciate the excellent coverage, reliable claims process, and good initial rates but dislike the frequent price increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Usage-based savings
Accident forgiveness
Recreational vehicle coverage
Reviews (441)
Richard
November 7, 2024
Verified Review
Excellent Company
Nationwide appears to be an excellent company. I have recommended this company to several of my friends. My daughter and her husband have also taken out policies and are very satisfied with this company. Thank you.
Irene
November 4, 2024
Verified Review
Sorry to be leaving you, Nationwide.
I used Nationwide for 32 years. I understand that insurance prices are going up, however, due to my limited income, I can no longer afford to stay with Nationwide.
Sara
November 1, 2024
Verified Review
Very Good!
The customer service is very good. They explain things well and make it easy to understand.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
815NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.64A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A+Why we picked this company
Nationwide offers a number of optional coverages, including gap insurance. You can add it to an existing auto insurance policy or consider purchasing it when buying a new policy. You can receive a quote online.
Pros
Offers 24/7 roadside assistance coverage add-on
SmartRide (for safe drivers) and SmartMiles (for low-mileage drivers)
Accident forgiveness available
Cons
Below-average customer satisfaction scores from J.D. Power
Some discounts and programs not available in all states
Not available in every state
Travelers
| User Reviews | 4.7 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9.0 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $115/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $244/mo |
4.7
Best choiceBased on 757 verified guest reviews and ratings
How drivers feel about Travelers
Drivers appreciate the lowest prices, excellent service, and responsive call centers but dislike the rising premiums and poor claims handling.
AI-generated from the text of verified reviews collected by Insurify
Best For
Numerous discounts
Gap insurance
Rideshare coverage
How drivers feel about Travelers
Drivers appreciate the lowest prices, excellent service, and responsive call centers but dislike the rising premiums and poor claims handling.
AI-generated from the text of verified reviews collected by Insurify
Best For
Numerous discounts
Gap insurance
Rideshare coverage
Reviews (389)
Nancy
November 18, 2024
Verified Review
Checking for Better Rate
Really good.
Jim
November 12, 2024
Verified Review
Typical
They were fair but within a month, they raised their premium by over $50.
Kenneth
November 5, 2024
Verified Review
Excellent
Excellent
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
829NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.94A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A++Why we picked this company
Travelers sells loan or lease gap coverage that you can add to your auto policy. You can get a quote on the company’s site or by calling Travelers at 1 (866) 620-5730.
Pros
Accident forgiveness available
Offers discount for hybrid and electric cars
A++ (Superior) financial strength rating from AM Best
Cons
Rideshare coverage not available in all states
High number of negative customer reviews with the Better Business Bureau
Higher-than-average number of complaints with the National Association of Insurance Commissioners
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 driver ages, genders, credit scores, and driver profiles for Colorado drivers.
Gap insurance vs. full coverage
Full coverage is a combination of three main auto policies for car buyers: liability insurance, collision insurance, and comprehensive insurance. Depending on your situation, it might make sense to invest in gap insurance in addition to full coverage for your used or new car.
Full-coverage insurance protects you in the event of a valid claim involving theft, accidents, or damages. Gap insurance will reimburse you for the difference between the insurance settlement after a total vehicle loss and your remaining auto loan balance. Having both types of coverage provides the most protection.
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Who needs gap insurance in Colorado?
Colorado doesn’t require drivers to buy gap insurance. If you decide to buy it, you should know that Colorado law has a maximum gap agreement fee that an insurance company or dealership can charge gap insurance buyers. The rule states that the gap fee can’t exceed $600 or 4% of the car loan amount, whichever amount is higher.[2]
While gap insurance is optional by state law and on the federal level, you may want to consider it in the following situations:[3]
You put down less than 20% on your vehicle.
Your auto loan is 60 months or longer.
You have a lease on your vehicle.
Your vehicle type depreciates quickly.
Negative equity from an old car loan transferred to your new loan.
Good to Know
You don’t need gap insurance if you don’t have a loan on your vehicle. It’s a special type of coverage for people financing or leasing their car. Your lender or creditor may require you to purchase it for the duration of your lease.
How to buy gap insurance in Colorado
Car dealers and insurance companies sell gap insurance in Colorado. It’s a good idea to shop around and compare gap insurance policies to find an affordable premium that fits your budget and needs.
While it’s possible to buy gap insurance as a stand-alone policy, many insurers will allow you to add it to your current car insurance coverage.
If you buy gap coverage through an auto dealer, you’ll pay more because the cost of gap insurance will roll into your auto loan and include interest payments.
Cheapest recent rates in Colorado
Drivers in and around Colorado have found policies from Allstate, Root, Farmers, and more, through Insurify in the last few days.
*Quotes generated for Insurify users within the last 10 days. Last updated on November 20, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from November 20, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
*Quotes generated for Insurify users within the last 10 days. Last updated on November 20, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from November 20, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
Gap insurance in Colorado FAQs
The following general information can help answer your remaining questions about gap insurance in Colorado.
Does Colorado require gap insurance?
No. Colorado doesn’t require gap insurance. But your lender may require it, so it’s a good idea to check your finance agreement. Even if you don’t have to buy it, you should consider adding it to your policy for extra protection.
How does gap insurance work in Colorado?
If someone steals your car, SUV, or truck — or you total it in an accident — gap coverage can pay the financial gap between what you owe on your loan or lease and the insurance settlement from your collision or comprehensive coverage.
Gap coverage works as asset protection for your vehicle. You can buy gap coverage as an optional benefit from your car dealer or insurance company.
What exactly does gap insurance cover?
Gap insurance covers the difference between your remaining loan or lease balance and the total amount your insurer pays out for your total vehicle loss. It can come in handy after a serious covered incident, like an accident that totals your car or vehicle theft.
Will gap insurance pay off your auto loan?
If you total your car or someone steals it, gap insurance will pay the remaining balance on your auto loan if it’s higher than the vehicle’s value. But gap insurance won’t help you with a loan to buy a new car.
Is gap insurance worth it?
Gap insurance may be worthwhile if you have a loan or lease on your vehicle. This is particularly true if you have a small down payment, a long-term loan, or drive a vehicle that depreciates quickly. An insurance agent can help you decide whether gap insurance makes sense for your needs.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
Related articles
More cities in Colorado
Sources
- Colorado Office of the Attorney General. "Mind the GAP: Securing relief for Colorado GAP borrowers."
- Colorado General Assembly. "Guaranteed Asset Protection Agreements."
- Insurance Information Institute. "What is gap insurance?."
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Anna BaluchInsurance Writer
Anna Baluch is a Cleveland-based personal finance and insurance expert. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions. Her work can be seen across the internet on many publications, including Freedom Debt Relief, Credit Karma, RateGenius, and the Balance. Connect with Anna on LinkedIn.
7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
Featured in
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