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Updated June 15, 2022
Gap Insurance in Indiana
If you are financing your new car and want to protect yourself against high out-of-pocket costs, you should consider adding gap insurance to your coverage. Gap insurance—which stands for “guaranteed asset protection”—covers the difference between what you owe on your car loan or lease and your vehicle’s actual cash value (ACV) in the event of an accident or theft. Compare cheap gap insurance options in Indiana on Insurify today!
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Best Companies for Gap Insurance in Indiana
Average car insurance monthly costs for leased vehicles in Indiana can go as low as $97 and as high as $311, amounting to a whopping $2,568 annual difference. This is why it is so important to get multiple quotes from different car insurance companies instead of committing to one insurance provider right away.
You can find more average monthly costs for the best auto insurance companies in Indiana below.
|Company||Average Monthly Cost for Leased Cars in Indiana|
|Midvale Home & Auto||$135|
See More: Cheap Car Insurance in Indiana
What is gap insurance?
If your car is totaled in a car accident or stolen, your car insurance coverage is going to reimburse you for your vehicle’s actual cash value at the time of the accident—not for the amount you purchased it for. After you buy a new vehicle, the value of your car goes down 20 to 30 percent within the first year. But you will still owe the original amount on your auto loan.
The difference between what you owe on your car and how much it’s worth creates a gap. For example, you take out a $15,000 loan to buy a new car. After a few years, its ACV goes down to $10,000 but you still owe $13,000 on it. In the event of a total loss, your insurance provider will pay you the vehicle’s ACV—$10,000—leaving you $3,000 in debt for a car you no longer own.
Gap insurance protects you from having to continue to make monthly payments to pay off your lease or loan if your car is gone as a result of a total loss accident or theft. Many auto insurance companies in Indiana offer it as an add-on to your full-coverage car insurance policy. Use Insurify to find the best deal on gap insurance in your area!
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Who should buy gap insurance in Indiana?
You don’t need gap insurance if you are not financing your vehicle. You may also not need to add on gap insurance if you are making a large down payment—at least 20 percent—because then your chances of ending up with negative equity (owing more on your car than it’s actually worth) are lower.
However, you should consider purchasing gap insurance in the following circumstances:
You made a down payment of 20 percent or less. Making a low down payment when you purchase your car means your car’s value will depreciate much faster.
It’s going to take you a long time to pay off your lease or loan. If your loan or leasing obligation with your lender is over 60 months long, you have a higher chance of being “upside down” on your car—owing more on it than it’s actually worth.
You already have negative equity from your last car loan. If you’ve taken out a car loan before and it rolled over, it’s important to get gap insurance to protect yourself from an even larger difference between your debt and your vehicle’s value.
You are financing a car and regularly travel long distances. How many miles you drive directly corresponds to how much of a depreciation hit your vehicle takes. If you know you will use your car to drive long distances, consider gap insurance.
You are leasing or taking out a loan on a luxury car. Certain car models, such as sports cars, depreciate faster than more standard ones.
Indiana Gap Insurance Laws
Indiana law does not require drivers to carry gap insurance—it’s an optional add-on available to you if you have comprehensive coverage and collision coverage. Indiana state laws only require the minimum liability insurance ($25,000 per person and $50,000 per accident in bodily injury and $25,000 in property damage liability coverage).
However, your lending institution may require you to purchase full coverage with gap insurance as an add-on. Complying with this requirement does not have to break the bank. Use Insurify to compare 10+ real-time gap insurance quotes from the best companies in the state of Indiana, and find the best auto policy for you.
How much gap insurance do I need in Indiana?
How much gap insurance you need depends on how fast your vehicle is predicted to depreciate, how much you owe on it, and your personal preference. On average, you can expect your vehicle to lose 20 to 30 percent of its value within the first year and over 60 percent within five years.
Generally speaking, you should calculate how much negative equity you are anticipating and pick a car insurance policy that is offering you enough coverage.
See More: How Much Car Insurance Do I Need?
How Gap Insurance Works in Indiana
How can I get a refund for gap insurance in Indiana?
In some cases, you might be able to get a partial refund if you pay for your gap insurance in advance and pay off your car early. However, it’s not possible to get a full refund for your gap insurance coverage.
Gap insurance is available as an add-on only if you already have existing comprehensive and collision insurance policies. If you don’t, some car insurance companies offer it as a stand-alone policy.
Gap insurance only covers the difference between what you owe on your vehicle and its actual cash value in the event of theft or a car accident that results in total loss. It does not cover repairs to your vehicle if it is not a total loss—you would use your comprehensive and collision insurance for that. Gap insurance also does not pay for medical bills or lost wages.
Here are other gap insurance specifics to be aware of:
Gap insurance rarely covers the deductible.
Gap insurance works regardless of fault in an accident.
If you have an accident that doesn’t result in a total loss, gap insurance doesn’t offer reimbursement for the decrease in your car’s actual cash value.
Gap insurance doesn’t cover the value of your car or loan balance if your vehicle is repossessed.
Some insurance companies in Indiana don’t offer gap insurance for used cars.
How Much Gap Insurance Costs in Indiana
The average monthly car insurance cost for a leased vehicle in Indiana is $179. If you purchase your gap insurance policy as an add-on to your existing full coverage, it will only add around $20 to your annual premium.
Car dealerships, banks, and lending institutions also offer gap insurance. Plus, you can buy it from a different car insurance company as an add-on. However, these options are associated with much higher costs. It can cost you a flat fee of $500–$700+ to buy gap insurance from a dealership or a lender and a flat fee of $200–$300+ to get it as a stand-alone policy.
If you don’t have full coverage—comprehensive and collision auto insurance—to add gap insurance to, use Insurify to compare 10+ real-time car insurance quotes tailor-fit to your preferences and needs, and find the cheapest deal today.
See More: Average Cost of Car Insurance in Indiana
How to Buy Gap Insurance in Indiana
Shopping for a full-coverage car insurance policy with gap insurance as an add-on doesn’t have to be expensive or stressful. According to Insurify data, you should get at least four quotes from different auto insurance companies in your area to find a car insurance policy that provides you with the best coverage at the lowest rate.
But shopping for auto insurance can get stressful. You have to research which car insurance companies offer gap insurance in Indiana and spend hours answering the same questions over and over to get a quote from each of them. Plus, you can get trapped by quote aggregation and lead-generation sites that make money off selling your information.
With a 4.8/5 customer satisfaction rating and over 3,000 customer reviews, Insurify is a top-rated and most-rated car insurance quote-comparison site in the U.S. Simply spend five minutes on our trusted site answering a few questions only once, and instantly get 10+ car insurance quotes that you can purchase online or over the phone. It’s fast, easy, and free!
Frequently Asked Questions: Gap Insurance in Indiana
As an Indiana driver, you do not have to carry gap insurance. However, if you are financing your vehicle, your financial institution may require you to purchase comprehensive and collision insurance with gap insurance as an add-on. Complying with this requirement doesn’t have to break the bank, though! Use Insurify to find 10+ cheap car insurance quotes in just a few clicks.
It depends on your car insurance provider. Generally speaking, you may be entitled to a partial refund of your gap insurance premium if you pay for your gap insurance in advance and pay off your car early. However, it’s not possible to get your full gap insurance coverage refunded.
The easiest and cheapest way to get gap coverage in Indiana is to purchase it as an add-on to your full-coverage policy. Use Insurify to compare affordable gap insurance quotes from the leading car insurance companies in Indiana, and compare them side by side in one place to find the best deal for you. Get your free quote today!
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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.