Compare Gap Insurance: Quotes, Discounts for 2023

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Charlie MitchellInsurance Writer

Charlie Mitchell is a journalist, researcher, and writer specializing in personal finance subjects. He holds a degree from Middlebury College. His work can be found in Vox, Mother Jones, The New Republic, and other publications. Charlie uses his expertise in home, renters, and auto insurance subjects to help inform people to make better financial decisions. Connect with Charlie on LinkedIn.

Jackie Cohen
Edited byJackie Cohen
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Jackie CohenEditorial Manager

Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.

Jackie's work has been cited in USA Today, The Balance, and The Washington Times.

Konstantin Halachev
Data reviewed byKonstantin Halachev
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

Updated July 5, 2022

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You finally bought that brand-new car! Congratulations. To protect the precious vehicle that you just bought with a big car loan, you did the right thing and bought a full-coverage auto insurance policy in case your car is totaled or stolen. But while that will insure the value of your vehicle, it might not be enough to cover the full loan amount. That’s when you need gap coverage.

When you take out an auto loan, you’re putting a lot of money on the line. To find the auto insurance company that’s willing to invest like you are, you need a trusted guide. That’s Insurify. In just a few minutes, you’ll get free access to special quotes and deals so you can compare insurance quotes side by side until you find the right one.

Quick Facts
  • Gap (guaranteed asset protection) insurance is required for most leased vehicles.

  • The cheapest provider we found for gap insurance is USH&C, with average monthly rates of $149.

  • Drivers can buy gap insurance as an add on to their existing policy or as a stand-alone policy.

Cheapest Companies for Gap Insurance Coverage

What companies offer gap insurance?

Many insurance providers offer guaranteed asset protection, or gap, insurance. Gap insurance provides protection when a drivers’ car is stolen or totaled, and many lenders will require this type of coverage. Drivers who lease their cars should probably consider adding gap insurance to their coverage.

Gap coverage sure doesn’t have to break the bank. Here’s a list of gap insurance companies that offer coverage at reasonable rates to get you started.

Insurance CompanyMonthly Quote for Gap Insurance
Amigo USA$154
Kemper$156
Travelers$188
Nationwide$207
Elephant$214
Clearcover$215
Safeco$226
Dairyland$311
Bristol West$317
AssuranceAmerica$319
The General$374
Infinity$451
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Best Car Insurance Companies

Best Car Insurance Companies

What is gap insurance?

Now that you’ve left the car dealership, you know that depreciation will reduce your car’s actual cash value by about 20 percent in its first year alone, according to the Insurance Information Institute. Ouch!

That’s enough to put you underwater, meaning that for a little while, you probably owe your lender more than your car is worth. Thus, if your new vehicle is totaled or stolen, your full-coverage car insurance policy still won’t pay off the car loan.

This is what gap insurance covers. Standing for “guaranteed asset protection,” gap coverage pays out the difference between the value of your car and the remaining loan payments you still owe your lender. (That gap is also called “negative equity.”)

Keep in mind, your car has to be a total loss for your gap insurance to kick in. Otherwise, your collision coverage and/or comprehensive coverage will cover the damage—after you pay the deductible on your full-coverage auto insurance policy, of course.

If you bought a new car, you are probably required by your lender or leasing agent to have gap insurance. Otherwise, it’s optional coverage. If you don’t have a loan or lease on your car, you have no use for gap coverage.

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How Gap Insurance Works

Here’s how to know if you need gap insurance. Take a look at the Kelley Blue Book to ascertain the current value of your car. Compare that with the amount you still owe on the car loan. If the value of the car is less than your remaining loan payments, you need gap insurance.

Why? Imagine this: You’re driving your new car without gap insurance. You still owe $25,000 on it, and unfortunately, you get in a wreck, and your car is totaled.

The collision insurance on your car insurance policy reimburses you for the car’s actual cash value (ACV), which is only $19,000, minus your $1,000 collision deductible. With a payout of only $18,000, you still have to make $7,000 in loan payments on a car that doesn’t even exist anymore! What a nightmare. You can see why gap insurance is important.

There are plenty of insurance companies that sell gap insurance as an add-on to their normal car insurance policies. Some insurance companies sell special gap coverage as a stand-alone policy. You’ll have to compare prices and exclusions on the various policies to see which is right for you.

Cheap Car Insurance

Cheap Car Insurance

Tips for Cheaper Gap Insurance

Is gap insurance worth it? Well, as long as you’re not paying too much, and you’re not holding on to it longer than you need to. Follow these tips to lower your gap insurance cost:

Drop It ASAP

Your new car isn’t going to be underwater forever. During your first year of loan payments, you’ll probably be holding some negative equity and need gap coverage. Unless you have a really long loan term, the amount you owe will soon be lower than the value of your car. So keep a close eye on Kelley Blue Book to drop gap insurance the first month it’s not necessary.

Mind the Gap

Just like when you’re shopping for collision coverage and comprehensive insurance, you don’t want your premiums to outweigh your potential payouts. Take a close look at the gap you’re working with: the gulf between your car’s value and the amount you still owe your lender. If the gap coverage premiums are greater than the gap in the first place, forget the gap insurance.

Avoid Dealership Gap Insurance

The dealership that sold or leased you your new car might have gap insurance to offer you, or it was included in your loan or lease agreement. That might be convenient, but you’ll almost always get better pricing with car insurance companies.

Shop Around for Car Insurance

Your current insurance provider might have a good gap insurance policy to add to your existing auto insurance policy. But what if you can do better elsewhere? New cars are expensive to insure. Make sure you compare car insurance quotes with Insurify’s well-reviewed tool that has saved millions of people money on their auto insurance premiums.

Best and Worst Sites to Compare Car Insurance

Best and Worst Sites to Compare Car Insurance

The Best and Cheapest Gap Insurance Coverage

Even though your car dealership will likely try to sell you a gap insurance policy, you’ll probably do better with an insurance provider. So do the smart thing with your money and go shopping. Using Insurify, you can quickly and easily find quotes from all the important insurance companies to get the gap coverage you need at the best price. Plus, it’s free.

Frequently Asked Questions

  • What is gap insurance?

    Gap insurance—which is also spelled GAP insurance because it stands for “guaranteed asset protection”—covers the negative equity you carry on a car loan. That’s the difference between your remaining loan payments and your car’s actual cash value, which could be lowered by depreciation.

  • How do I know if I need gap insurance?

    If you have a loan or lease on your car, you might need gap insurance, at least for the first year you’re driving your new car. But as soon as your car’s Kelley Blue Book value is lower than the amount you owe in loan payments, you won’t need gap coverage anymore.

  • How do I get cheap gap insurance?

    Combining gap insurance with your normal car insurance coverage and then combining your car insurance policy with a policy like homeowners policy and other insurance is the best way to save money on your insurance bills. Insurify will search far and wide for the insurance providers that suit your needs best. It’s time to try it out!

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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.

Charlie Mitchell
Charlie MitchellInsurance Writer

Charlie Mitchell is a journalist, researcher, and writer specializing in personal finance subjects. He holds a degree from Middlebury College. His work can be found in Vox, Mother Jones, The New Republic, and other publications. Charlie uses his expertise in home, renters, and auto insurance subjects to help inform people to make better financial decisions. Connect with Charlie on LinkedIn.

Jackie Cohen
Edited byJackie CohenEditorial Manager
Photo of an Insurify author
Jackie CohenEditorial Manager

Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.

Jackie's work has been cited in USA Today, The Balance, and The Washington Times.

Konstantin Halachev
Data reviewed byKonstantin HalachevVice President of Engineering
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

Compare Car Insurance Quotes Instantly

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

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