Gap Insurance in Colorado (2024)

Gap insurance in Colorado can help if you total your financed or leased vehicle.

Anna Baluch
Written byAnna Baluch
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Anna BaluchInsurance Writer
  • 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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Katie Powers
Edited byKatie Powers
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Katie PowersAuto and Life Insurance Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

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Updated July 11, 2024

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Cheapest recent rates in Colorado

Drivers using Insurify have found quotes as cheap as $55/mo for liability only and $101/mo for full coverage in Colorado.

*Quotes generated for Insurify users from Colorado within the last 10 days. Last updated on July 11, 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 July 11, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

*Quotes generated for Insurify users from Colorado within the last 10 days. Last updated on July 11, 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 July 11, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

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.

What is gap insurance, and how does it work?

Gap insurance is an optional auto insurance coverage that can provide financial protection in the event of 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.[2]

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 will pay the remaining amount on your car loan or lease after total vehicle loss if your insurance settlement amount for the value of your vehicle 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.

Gap insurance vs. full coverage

Full coverage is a combination of three main auto policies for car buyers: liability insurance, collision coverage, 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 will provide financial compensation in the event of a valid claim involving theft, accidents, or damages. Gap insurance will reimburse you for the difference between the insurance settlement from your collision or comprehensive coverage after total vehicle loss and your remaining auto loan balance. Having both 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 a policy in the state, 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.[3]

While gap insurance is an optional financial product by state law and on the federal level, you may want to consider it in the following situations:[4]

  • 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.

“Luxury cars tend to depreciate faster than other cars because they are expensive in the first place and because many luxury car buyers want a new vehicle, not a used car,” says Kate Terry, CEO and co-founder of Surround Insurance.

You don’t need gap insurance if you’re a car owner without any personal loans 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 can expect a higher bill because the cost of gap insurance will roll into your auto loan and include interest payments.

Recent Insurify quotes for Colorado drivers

Drivers in and around Colorado have found policies from GEICO, USAA, State Farm, and more, through Insurify in the last few days.

*Quotes generated for Insurify users within the last 10 days. Last updated on July 11, 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 July 11, 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 July 11, 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 July 11, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

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

Compare personalized, real-time quotes
User Reviews
3.4
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.
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.
$66/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.
$139/mo

American Family lets you enroll in a gap insurance policy as an add-on to your policy. You can get a quote online on the website or mobile app after you provide your contact information and financial information.

Pros
  • High rates of customer satisfaction

  • Numerous discount and coverage options

Cons
  • Only available in 18 states

  • Rates are merely moderate compared to other insurers

Read more driver reviews of American Family
Rosa Monica - July 6, 2024
Verified

Awesome agency!

Ask about the discounts! Nicole's team is amazing at customizing coverage for your needs.

Jean - July 2, 2024
Verified

AMFAM is reliable.

I had no issues with AMFAM. The premium just got a bit too high for my budget.

Tenise - July 1, 2024
Verified

Difficulties with the American Family Agent This Year

The agents at this company, where I've been a client for several years, don't seem to be very responsive. My recent agent, who was initially good, doesn't seem to be available to discuss changes. It feels like they don't care about their clients or take the time to chat or text with them.

Nationwide

Compare personalized, real-time quotes
User Reviews
3.4
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.
$79/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.
$168/mo

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
  • Numerous discount and savings opportunities

  • SmartRide (for safe drivers) and SmartMiles (for low-mileage drivers)

Cons
  • Not available in every state

  • Some discounts and programs not available in all states

Read more driver reviews of Nationwide
Joseph - July 5, 2024
Verified

Wish for Combined Auto and Homeowners Insurance

I wish you guys would insure my vehicles so I can combine it with my homeowners insurance.

Mary - July 3, 2024
Verified

Senior Opinion

Visited face-to-face with an agent.

Theresa - June 30, 2024
Verified

Unfair Insurance for Safe Drivers

The insurance for safe drivers is unbelievably high.

Travelers

Compare personalized, real-time quotes
User Reviews
3.5
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.
9.0/10
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.
$119/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.
$254/mo

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

  • Robust coverage selections and discount offerings

Cons
  • Rideshare coverage only available in Colorado and Illinois

  • High number of negative customer reviews with the Better Business Bureau

Read more driver reviews of Travelers
David - July 2, 2024
Verified

Good Until a Claim Was Made

It started as a good value. However, after one claim from an animal hitting our car, they raised our rates by almost a thousand dollars, with no other claims.

Daniel - June 28, 2024
Verified

Excellent

I really only had to make one claim during my time. It went pretty well.

Linda - June 26, 2024
Verified

Age

I am trying to get a better rate. I have had zero claims in many years, in fact, I've never had a claim for the entire duration. Could this be age discrimination? I am 80 and never travel more than 2 miles away from home, yet my rate still goes up!
  • 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 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 bank, credit union, dealer, lender, or financial institution may make it mandatory, 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 financial automobile 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?

    A gap agreement covers the difference between your remaining loan balance or lease balance and the total amount of money your insurer pays out for comprehensive or collision insurance in the event of a covered claim for total vehicle loss. It can come in handy after a serious covered incident, like an accident that totals your car or vehicle theft.

  • 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 or financial advisor with experience can inform you whether gap insurance or other insurance products make 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
Full-coverage premium averages correspond to the same bodily injury and property damage limits in addition to:
  • 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.

Sources

  1. Colorado Office of the Attorney General. "Mind the GAP: Securing relief for Colorado GAP borrowers."
  2. Consumer Financial Protection Bureau. "What is Guaranteed Asset Protection (GAP) insurance?."
  3. Colorado General Assembly. "HB23-1181: Guaranteed Asset Protection Agreements."
  4. Insurance Information Institute. "What is gap insurance?."
Anna Baluch
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.

Katie Powers
Edited byKatie PowersAuto and Life Insurance Editor
Photo of an Insurify author
Katie PowersAuto and Life Insurance Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

Featured in

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