Gap Insurance in Massachusetts (2024)

If your car sustains severe damage and is a total loss, gap insurance can step in to protect your finances.

Jacqueline DeMarco
Jacqueline DeMarco
  • 13+ years writing insurance and personal finance content

  • Insurance, lending, and retirement expert

Jacqueline has contributed content, and her personal finance passion, to dozens of noteworthy financial brands, including Credit Karma, Bankrate, and MagnifyMoney.

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Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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Updated July 14, 2024

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Cheapest recent rates in Massachusetts

Drivers in and around Massachusetts have found policies from Midvale Home & Auto, MAPFRE, Liberty Mutual, and more, through Insurify in the last few days.

*Quotes generated for Insurify users from Massachusetts 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 Massachusetts 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.

Are you considering financing a new car in Massachusetts? If so, understanding the importance of gap insurance in Massachusetts is crucial.

Gap insurance acts as a safety net to protect you from potential financial gaps in the event of a total loss from accident or theft. This coverage is especially useful for people who lease or finance their cars.

Here are the ins and outs of gap insurance in Massachusetts, its benefits, and why it’s essential for people with leased cars or car loans.

Quick Facts
  • Gap insurance adds $20, on average, to your annual premium, according to the Insurance Information Institute.[1]

  • Buying gap insurance through an insurance company is usually cheaper than doing so at an auto dealer.

  • Many insurance companies offer this type of coverage as an endorsement.

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What is gap insurance, and how does it work?

Gap insurance — also known as guaranteed auto protection insurance — is a type of insurance coverage that helps protect car owners from financial loss in the event of a total-loss accident or theft. It covers the “gap” between the vehicle’s actual cash value (ACV) and the amount you still owe on the car loan or lease.[1]

When you purchase a new car or truck, its value instantly begins to depreciate. Most vehicles experience a significant drop in value — often around 20% — within the first year. If you have a standard auto insurance policy, it typically covers the depreciated value of the vehicle. In other words, if your insurer declares your car a total loss, it will reimburse you for the current market value of the vehicle as of the time you file a claim.

However, if you leased or financed the purchase of your new car with a down payment of less than 20%, there’s a possibility that the amount left on the loan or lease will be more than the market value of the vehicle in the initial years of ownership. This creates a gap between what your insurance company pays after a total loss and what you still owe on the loan or lease.

What does gap insurance cover in Massachusetts?

Gap insurance covers the difference between the ACV that your insurance policy pays and the remaining amount you owe on the loan or lease. In the event of a total loss accident or theft, the gap insurance company pays off the remaining balance on your loan or lease, ensuring you don’t have to bear the financial burden.

For example, let’s say you purchased a car for $30,000 and took out a loan to finance it. A year later, the car is in an accident and your insurer declares it a total loss, reimbursing you for its actual cash value of $24,000. However, you still owe $28,000 on your car loan. In this scenario, your standard auto insurance will only pay you $24,000 based on the car’s ACV, leaving you with a $4,000 gap. With gap insurance, the insurance company covers this $4,000 gap, allowing you to pay off the loan completely.

Good to Know

It’s important to note that gap insurance typically has certain limitations and restrictions. It may have a maximum coverage limit, and it usually doesn’t cover other expenses such as deductibles, late-payment fees, or extended warranties. Additionally, it's usually only available for new and leased cars, not used vehicles.[1]

Gap insurance vs. full coverage

In Massachusetts, full-coverage insurance generally refers to a combination of different types of auto insurance coverage that provide a higher level of protection than the state’s minimum required coverage.

In Massachusetts, the minimum required auto insurance coverage includes:[2]

  • $20,000 per person for bodily injury liability

  • $40,000 per accident for bodily injury liability

  • $5,000 per accident for property damage liability

  • $8,000 per accident for personal injury protection (PIP)

  • $20,000 per person and $40,000 per accident for uninsured motorist coverage

Full-coverage insurance includes these mandated coverages, plus comprehensive and collision insurance coverages. Comprehensive insurance pays for damages to your car not related to collisions like theft, vandalism, and weather damages. Collision insurance pays for your car repairs from collision-related damages, like hitting a pole or another vehicle. However, neither of these coverages pay for the difference between your auto loan and lease and your car’s actual cash value after a total loss, but that’s where gap insurance comes in.

Who needs gap insurance in Massachusetts?

Whether someone with full coverage needs gap insurance depends on their specific circumstances. It’s particularly beneficial for people who:[1]

  • Made a small down payment: If you made a down payment of less than 20% on your vehicle, there’s a higher likelihood of the loan amount exceeding the market value, making gap insurance valuable.

  • Have a long-term loan or lease: If you financed your vehicle for 60 months or longer, the gap between the loan amount and the vehicle’s value may persist for a significant portion of the loan term, making gap insurance beneficial.

  • Lease a vehicle: Lessors often require gap insurance leased vehicles, as it protects against potential financial gaps in the event of a total loss.

  • Purchased a fast-depreciating vehicle: Some vehicles depreciate at a faster rate than average. If you bought a vehicle with a higher depreciation rate, the gap between the loan amount and the vehicle’s value could be significant, making gap insurance a wise choice.

  • Rolled over negative equity: If you rolled over negative equity from a previous car loan into your new loan, the loan amount may exceed the vehicle’s value, making gap insurance important for protecting against financial loss.

Considering these factors, it’s important to assess your specific financial situation and the potential gap between the loan/lease amount and the vehicle’s value. If you determine that the gap could pose a financial burden, buying gap insurance can provide additional peace of mind and financial protection.

“Gap coverage is essential for drivers of leased vehicles because of the residual value, but also can provide important financial protection for vehicle owners who have long-term loans,” says Mark Friedlander, director of corporate communications of the Insurance Information Institute.

Keep Reading: Car Insurance for Leased Vehicles: What to Know

Keep Reading: Car Insurance for Leased Vehicles: What to Know

How to buy gap insurance in Massachusetts 

You can typically purchase gap insurance from car dealerships and insurance companies. The cost of gap insurance varies depending on factors such as the value of the vehicle, the length of the loan or lease, and the insurer. It’s often available as an add-on or endorsement to your existing auto insurance policy.

“While most car dealers offer gap coverage, we strongly recommend consumers only purchase the coverage through their auto insurer versus buying it from the dealer,” says Friedlander. “There is a major cost differential. Don’t let a car dealer talk you into purchasing gap coverage from them.”

How much does gap insurance cost in Massachusetts?

Gap coverage is an endorsement you can easily add to your auto insurance policy. “You can add gap coverage to your policy for about $20 to $30 a year on average,” says Friedlander. For example, a full-coverage policy in Massachusetts costs an average of $186 a month. Adding gap insurance could only add $1 to $2 a month to your policy.

It’s important to note that not all auto insurers offer gap coverage, and Friedlander advises looking into your coverage options before you either lease or purchase a vehicle and finance it.

Best gap insurance companies in Massachusetts

Looking for gap insurance in Massachusetts? These are some of the best gap insurance companies.

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User Reviews
2.9
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.
7.7/10
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.
$129/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.
$296/mo

In business for more than 100 years, Liberty Mutual offers auto, homeowners, condo, renters, flood, life and other insurance products. Policyholders have access to numerous discounts, including bundling, good student, military, student-away-at-school, claims-free, violation-free, and multi-car discounts. Liberty Mutual has an A rating for financial strength from A.M. Best and an A+ rating from the Better Business Bureau. However, the company has three times the expected rate of complaints in the National Association of Insurance Commissioner’s Consumer Complaints Index, and low ratings on consumer review sites Trustpilot and Sitejabber.

Pros
  • Wide range of available discounts

  • Accident forgiveness available

Cons
  • Many negative reviews and customer complaints

  • Premiums are relatively high compared to industry average

Read more driver reviews of Liberty Mutual
Wanda - July 13, 2024
Verified

Wanda

Excellent company.

Melinda - July 13, 2024
Verified

Stay Away from Liberty Mutual

Liberty Mutual starts out with reasonable rates, but then the rates double.

John - July 13, 2024
Verified

Fair

They raised my premium to a point where I could not afford it.

Parents of young drivers can gain some much-needed confidence when insuring their teen drivers with Liberty Mutual, as this insurance company earned an Insurify Quality (IQ) Score of 3.8. Parents can insure their teens at an affordable price of $176 per month, on average, for liability-only insurance. Additionally, Liberty Mutual offers a variety of discounts suited for young drivers.

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User Reviews
3.7
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.
9.4/10
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.
$46/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.
$100/mo

In business for more than 100 years, USAA exclusively serves members of the military and their immediate families. The company offers multiple types of insurance products, as well as banking, investing, and retirement services. Auto insurance customers have access to a number of discounts, including for bundling, insuring multiple vehicles, living on a military base, and more. A.M. Best gives USAA an A++ rating for financial strength, and the company had the highest or second-highest rating of all insurers in every region in J.D. Power’s Overall Customer Satisfaction Index. Customer reviews are mixed for service and claims processing.

Pros
  • Low premiums

  • SafePilot program rewards good driving with up to 30% discount

Cons
  • Only available to active-duty military, veterans, military spouses, or children of service members or veterans

  • No 24/7 customer phone support

Read more driver reviews of USAA
Jane - July 14, 2024
Verified

Easy

Great

Ann - July 13, 2024
Verified

Mediocre Company

They are requiring us to cover our house for more than we feel is necessary. Their deductible for hail damage is $10,000 and the premiums are high.

Laurence - July 13, 2024
Verified

Greed and Lack of Respect

It's almost impossible to reach them by phone. They are rapidly raising rates without cause, despite my loyalty of over 58 years.

USAA is one of the best options for affordable car insurance in Massachusetts, with an average monthly rate of $23 for liability-only insurance and an IQ Score of 4.5. For gap insurance, you can inquire about car-replacement assistance coverage, which gives policyholders a settlement with an additional 20% of the actual cash value of the vehicle if they file a claim and USAA declares their car a total loss.

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A.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
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.
8.0/10
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.
$69/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.
$114/mo

Owned by American Family Insurance, Midvale offers auto and home insurance. In addition to liability, collision and comprehensive coverages, Midvale also offers gap insurance, rental car reimbursement, and roadside assistance. Discounts are pretty standard for the industry, including good student, multi-vehicle, multi-product, and pay-in-full discounts. Midvale as an excellent (A) rating from A.M. Best for financial stability. Customer complaints in the National Association of Insurance Commissioner’s Consumer Complaints Index are only slightly higher than expected for the industry.

Pros
  • Backed by the financial strength of American Family

  • Optional gap insurance and roadside assistance available

Cons
  • Can’t get a quote online – must call an agent

  • Poor customer reviews with Better Business Bureau

Midvale Home & Auto is an excellent car insurance company for families due to this company’s comprehensive coverage options tailored to meet the specific needs of parents and their children.

A liability-only policy with Midvale Home & Auto only costs an average of $87 a month, and discounts are available to families who insure multiple cars, bundle insurance policies, have a student with good grades, or have a student away at college.

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User Reviews
3.2
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.
8.9/10
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.
$138/mo

Founded by Sears department store executives in 1931, Allstate offers auto, home, motorcycle, ATV, renters, condo, and term life insurance. Operating in all 50 states, the company has superior ratings from A.M. Best for financial strength and credit. However, Allstate has many negative reviews on consumer websites, and a slightly higher-than-average complaint rating in the National Association of Insurance Commissioners Consumer Complaint Index. Allstate offers many discounts, including for good students, multiple policies, bundling auto and home insurance, new vehicles, safe driving, and good payment history.

Pros
  • Well-established with superior ratings from A.M. Best

  • Pay-per-mile option available

Cons
  • Low customer satisfaction

  • Rates are merely average compared to other insurers

Read more driver reviews of Allstate
Jennie - July 14, 2024
Verified

Cain Insurance is Great!

Cain Insurance has always been fair to me and my late husband.

Brice - July 13, 2024
Verified

Disappointed with Allstate

I would never continue a relationship that is supposed to be mutually beneficial for an extended period of 13 years, knowing that they never had my best interest at heart. They may mislead you to add onto your coverage by promising that if you have to utilize that benefit, it will offer you certain advantages. However, when you attempt to utilize an endorsement that costs you additional money on your premium, it offers nothing that they used to upsell that endorsement. With Allstate, it feels like you're in the hands of a company that prioritizes its own interests.

Anthony - July 13, 2024
Verified

Difficulties with Allstate's Phone Service

The telephone service is poor; it's hard to speak to anyone knowledgeable.

With a low monthly average rate for liability-only insurance of $49 and an IQ Score of 4.1, Allstate is a solid option for Massachusetts drivers looking for gap insurance, and especially for people who work as rideshare drivers. With Ride for Hire coverage, rideshare drivers can get extra protection that their normal policy doesn’t offer to receive the protection they need while working.

Cheapest recent rates in Massachusetts

Drivers in and around Massachusetts have found policies from MAPFRE, Safeco, Midvale Home & Auto, 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.

Massachusetts gap insurance FAQs

If you’re considering buying gap insurance in Massachusetts, below is a breakdown of some frequently asked questions about this type of policy to help you prepare for this purchase.

  • Does Massachusetts require gap insurance?

    No. Massachusetts doesn’t require gap insurance coverage.[2] Gap insurance is optional in Massachusetts, and it’s up to car owners to decide whether to purchase it.

  • How do you file a gap insurance claim in Massachusetts?

    To file a gap insurance claim in Massachusetts, you typically need to contact your gap insurance company and provide it with the necessary documentation, such as your insurance policy details, proof of the gap amount, and information about the underlying auto insurance claim.[3]

  • Do you need gap insurance if you have full coverage?

    If you want the protection gap insurance provides, you still need it even if you have a full-coverage policy. “Gap insurance is an optional coverage that can be easily added to your auto insurance policy as an endorsement,” says Friedlander. “It is not considered part of a full-coverage policy, which typically includes comprehensive and collision coverages.”

  • Why is gap insurance more expensive through a dealership?

    Car dealerships tend to charge much more than insurance companies for gap insurance, according to Friedlander. This is somewhat understandable, as insurance companies specialize in issuing insurance products and can add an inexpensive gap policy onto a customer’s standard car insurance policy.

Sources

  1. III. "What is gap insurance?."
  2. Commonwealth of Massachusetts. "Basics of Auto Insurance."
  3. III. "How to file an auto insurance claim."
Jacqueline DeMarco
Jacqueline DeMarco

During college, Jacqueline DeMarco interned at a retirement plan advisory firm and was tasked with creating a presentation on the importance of financial wellness. During her research into how money can affect our health, relationships and career, Jacqueline realized just how important financial education is. Jacqueline is a contributor for Insurify and has worked with more than a dozen financial brands, including LendingTree, Capital One, Credit Karma, Fundera, Chime, Bankrate, Student Loan Hero, ValuePenguin, SoFi, and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school.

Courtney Mikulski
Edited byCourtney MikulskiSenior Editor, Auto
Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

Featured in

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