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Best Cheap Gap Insurance Companies in Maryland: Quotes, Discounts (2022)

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Aissa Martell

By: Aissa Martell

Edited by Tanveen Vohra | Reviewed by licensed insurance agent, Amber Benka

Last Updated June 15, 2022

Why you can trust Insurify

Insurify partners with top insurance companies and is a licensed agent in all 50 states. However, the insurance experts writing our content operate independently of our partners. Check out reviews from over 3,000 satisfied customers, how we make money, our data methodology, and our editorial standards.

Getting a new car is exciting, but have you thought about insurance? If you’re leasing your new vehicle, you should consider gap insurance. If you have a car loan in Maryland, and your car is totaled or stolen, gap insurance covers the amount you owe, minus the current value your car insurance pays. Find the right insurance coverage from a top-notch auto insurance company with Insurify, today!

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Best Companies for Gap Insurance in Maryland

There are many great insurance providers that offer affordable insurance coverage. The following table represents the average insurance rates with different companies for a leased car with gap insurance in Maryland.

Insurance CompanyAverage Monthly Cost for Leased Cars in Maryland
Progressive$205
SafeAuto$234
Travelers$234
Kemper Preferred$243
Clearcover$289
Safeco$299
Elephant$302
Nationwide$311
National General$339
Liberty Mutual$377
Disclaimer: actual quotes may vary based on the policyholder's unique driver profile.

What is gap insurance?

If you decide to finance a new vehicle with an auto loan or a lease, the moment you drive away from the dealership, your car’s cash value depreciates. Two years down the line, your car’s cash value will not be the same amount that you agreed to pay and are still paying off.

Imagine your car is stolen or totaled and the cost of repairs is more than it’s actually worth. Your collision or comprehensive coverage will pay your car’s actual cash value (ACV), and this could leave a balance for you to pay with your lessor or lender. If you have gap coverage, it will kick in and pay the amount you still owe to your dealership or lender due to the natural depreciation of your vehicle.

Gap insurance, which stands for “guaranteed asset protection,” is also sometimes referred to as “upside-down” or “underwater” protection because you owe more than the depreciated vehicle is actually worth. Also, because it may be offered by institutions other than insurers like banks, credit unions, and car dealerships, it is also called a “gap waiver.”

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Who should buy gap insurance in Maryland?

Gap insurance is worth considering if you are financing your car. It is only valuable for the duration of the lease or loan while it is more than the value of the car and is unnecessary for car owners who paid in full. Gap insurance is a good idea if you made a low down payment, usually 20 percent or less, and will be financing the vehicle for more than five years. Also, depending on the make or model of the car, it may depreciate faster than average.

Maryland Gap Insurance Laws

Maryland insurance laws don’t require you to have gap insurance. Maryland laws only require that you have a minimum amount of car insurance coverage. The minimum liability insurance you must have is $30,000 for bodily injury per person, $60,000 per accident, and $15,000 for property damage. The state requires underinsured and uninsured motorist protection (UM) of the same limits.

Liability insurance covers accidents that you are at fault for. In Maryland, UM insurance covers your property damages and medical expenses if you’re in an accident with someone who is uninsured or underinsured or in a hit-and-run. Personal injury protection (PIP) and gap insurance are not required; however, insurers must offer a minimum of $2,500 of PIP, which you may accept or decline.

All of Maryland’s insurance products are regulated by the Maryland Insurance Administration, located in Baltimore. All insurers must follow their guidelines. You can file a complaint with their office for any of your insurance concerns, including gap insurance. Also, insurance in Maryland allows drivers to receive diminished value from the at-fault party in a car accident.

How much gap insurance do I need in Maryland?

How much gap insurance you will need in the event you suffer a total loss depends on your car’s depreciation. Industry professionals have determined that new cars usually depreciate most in the first year you get it, at about 20 percent, then the car depreciates by 15 percent a year after that. After five years, cars are worth 40 percent of what you leased them for.

Gap insurance is about how much you owe on your lease or car loan. If you lease a car for $30,000 and after five years, it has an actual cash value of $12,000, your auto policy will only pay the actual cash value. If your loan balance is $15,000, you would need $3,000 in gap insurance to cover the loan or lease.

See More: How Much Car Insurance Do I Need?

How Gap Insurance Works in Maryland

Can you get a refund for gap insurance in Maryland?

In some cases, you may 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 in Maryland does not follow any specific guidelines exclusive to the state. It pays the excess amount of your loan or lease after you pay your deductible and your car insurance policy pays the actual cash value. Policyholders of gap insurance won’t have to break the bank if, after a year, they total their $50,000 vehicle and its value has depreciated to $20,000. Gap insurance will cover the difference.

How Much Gap Insurance Costs in Maryland

It’s important to note that while you can purchase gap insurance coverage from a car dealership, you’ll likely see much higher annual costs than if you add it on to an existing car insurance policy. Gap insurance from a car dealership can cost as much as $500 to $700+ per year!

However, gap insurance can save you a lot in the long run, and the good news is that it doesn’t need to break the bank. If you add gap insurance to your existing auto insurance policy, it is typically only an additional $20 to $40 a year.

See More: Average Cost of Car Insurance in Maryland

How to Buy Gap Insurance in Maryland

When you’re ready to buy a new car, there’s a lot for you to think about. Finding the right vehicle that’s going to be your and your passengers’ new reliable companion requires time and effort. When you’re ready to find the right insurance products for your new vehicle, like gap insurance, at the best insurance rates, it’s a breeze with Insurify. Compare car insurance rates with gap insurance coverage all in one place in minutes.

Frequently Asked Questions: Gap Insurance in Maryland

  • Maryland law has minimum requirements for liability coverage and uninsured and underinsured motorist protection. Gap insurance is not required; it is additional insurance that you can get with your auto policy or from your dealership.

  • If you pay off your car in the time you agreed to, you will not get a gap insurance refund. If you pay your car off before the allotted time, you may be eligible for a refund if you paid a one-time fee up front with your dealership.

  • Maryland has a lot of excellent insurance companies to choose from. With Insurify, you can quickly narrow down your options by comparing auto insurance quotes with gap insurance. You may have to travel far and wide to find just the right vehicle with the perfect saddle, but you can find the right car insurance policy with the best company all in one place with Insurify.

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  • The car insurance quotes displayed are based on an analysis of Insurify’s database of over 40 million quotes from 500 ZIP codes nationwide. To obtain representative rates, Insurify’s data science team performs frequent comprehensive analyses of the factors car insurance providers weigh to calculate rates including driver demographics, driving record, credit score, desired coverage level, and more.

    Insurify’s analysis also incorporates the Insurify Composite Score (ICS) assigned to each insurance provider. The ICS is a proprietary rating that weighs multiple factors reflecting the quality, reliability, and health of an insurance company. Ratings used to calculate the ICS include Financial Strength Ratings from A.M. Best, Standard & Poor’s, Moody’s, and Fitch; J.D. Power ratings; Consumer Reports customer satisfaction surveys and customer complaints; mobile app reviews; and user-generated company reviews. 

    With the above insights and ranking methods, Insurify is able to offer car insurance shoppers insight into how various insurance providers compare to one another in terms of both cost and quality. Note, actual quotes will vary based on unique attributes including the policyholder’s driver history and their garaging address.

Aissa Martell
Aissa Martell

Insurance Writer

Aissa Martell is a licensed insurance producer in the State of New York. She is a creative writer and has been freelance writing for five years. She’s happy to share her knowledge of the insurance industry and its products.

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