Gap Insurance in Michigan (2024)

You can buy gap insurance from an insurance company, car dealer, or credit union in Michigan.

Melanie Lockert
Written byMelanie Lockert
Melanie Lockert
Melanie Lockert
  • 10+ years writing on personal finance topics

  • Host of the Mental Health and Wealth podcast

Melanie is a blogger, author, and speaker specializing in personal finance and debt management. She’s also the author of the blog and book “Dear Debt.”

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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 May 23, 2024

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Cheapest recent rates in Michigan

Drivers using Insurify have found quotes as cheap as $47/mo for liability only and $102/mo for full coverage in Michigan.

*Quotes generated for Insurify users from Michigan within the last 10 days. Last updated on May 23, 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 May 23, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

*Quotes generated for Insurify users from Michigan within the last 10 days. Last updated on May 23, 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 May 23, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

In the event of total vehicle loss, severe damage, or theft, gap insurance covers the difference between the value of your car and the remaining amount you owe on your car loan.[1] It’s smart to invest in gap insurance if you have a car loan or lease your vehicle.[2]

Though Michigan has the most expensive car insurance rates in the U.S., you shouldn’t try to save money on insurance by skipping this optional coverage type. Comparing car insurance rates from multiple companies can help you find affordable coverage.

Quick Facts
  • Auto lenders don’t typically require drivers to purchase gap insurance.

  • Gap insurance pays out after collision and comprehensive coverage.

  • Most cars depreciate in value by 20% within a year, which means you can owe more on your car loan than the value of your car.

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What’s gap insurance, and how does it work?

Also sometimes referred to as guaranteed asset protection, guaranteed auto protection, or loan/lease coverage, gap insurance is optional coverage. It pays the difference between the actual cash value (ACV) of your vehicle and your car loan balance if someone steals your car or you total your vehicle.

For example, if a car accident totals your vehicle, your insurer may cover the current worth of your vehicle (minus your deductible) with collision insurance.[3] However, the ACV of your vehicle may cost less than what you still owe on your auto loan.

Your new car will likely depreciate in value by 20% during the first year you own it, according to the Insurance Information Institute. Since vehicles depreciate rather quickly, gap insurance can provide financial protection if you’ve financed or leased your vehicle. Buying gap insurance helps you avoid making out-of-pocket payments for a total loss or stolen vehicle.

What does gap insurance cover in Michigan?

Gap insurance can cover the cost difference between the ACV of your vehicle and the remaining auto loan or lease balance. It’s a supplemental coverage that works alongside collision and comprehensive coverage in the event of auto theft or a vehicle-totaling accident. It doesn’t cover partial vehicle damage, routine maintenance, or missed car payments.

Here’s an example to demonstrate how the coverage works. In this scenario, you have $30,000 left on your auto loan, the ACV of your car is $25,000, and your comprehensive coverage deductible is $500.

If someone steals your car, your comprehensive policy payout is $24,500, which is the ACV of your vehicle minus your deductible. You still owe $5,500 on your auto loan. If you have a gap insurance policy, it can cover this remaining balance so you don’t have to deal with a financial loss.

You should know that gap insurance coverage may have maximum claim benefits and loan term limits. Read the terms and conditions of your policy to understand the reach of your coverage.

Keep in Mind

When you lease or finance a vehicle, the insurance payout from a total loss will go to pay the leasing company or lender — not in your pocket.

Gap insurance vs. full coverage

A full-coverage policy in Michigan generally includes a combination of coverages to keep you protected, including liability, collision, and comprehensive insurance. Michigan requires drivers to carry a minimum amount of bodily injury and property damage liability insurance to cover the costs of the other driver’s medical bills and vehicle damage in the event of an accident.

Collision coverage kicks in to cover your vehicle damages after an accident, and comprehensive insurance pays for repairs caused by vandalism, severe weather, and other qualifying events. Though full-coverage insurance provides a range of protections for Michigan drivers, it doesn’t include gap insurance. However, the two optional coverages do work well together.

Not everyone with full-coverage insurance needs gap insurance, but it’s a good idea for drivers financing or leasing a vehicle worth less than their auto loan balance.

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Who needs gap insurance in Michigan?

Michigan law doesn’t require gap insurance, but your lender might. Even if it doesn’t, it’s typically a smart move to consider gap insurance if you’ve financed or leased your vehicle.

You should consider gap insurance if any of the following statements apply to you:

  • Your auto loan lender requires it.

  • You have a repayment term of 60 months or more.

  • You put no or a low down payment (such as 20% or less) on your vehicle.

  • You’re currently leasing a vehicle.

  • You have a high interest rate on your auto loan.

  • You have a luxury or electric vehicle that may depreciate faster than standard vehicles.

  • You have negative equity from your previous auto loan rolled into your new one.

“It’s not uncommon for the value of a vehicle to depreciate quickly, especially with new vehicles,” says Zack Fortman, personal lines insurance agent and office manager at Fortman Insurance Services. “When this happens, there could be a gap between the vehicle value and loan amount.”

If the current balance on your auto loan exceeds the actual cash value of your vehicle, you should purchase gap insurance. You may not need gap insurance, however, if the difference between your auto loan balance and the actual cash value is small or if you can comfortably afford any gaps between the insurance payout and your auto loan.

How Much Will Insurance Pay for My Totaled Car? (Full Guide)

How Much Will Insurance Pay for My Totaled Car? (Full Guide)

How to buy gap insurance in Michigan

If you’re buying a new vehicle, the dealership might offer you gap insurance during the purchase. Though this is convenient, you typically can find more cost-effective options. In Michigan, you can purchase gap insurance from an insurance company or your lender. Not all auto insurers offer it, so you should check with your current insurer.

If you get gap insurance through a car insurance company, you can typically add it to your current policy. For example, if you have collision and comprehensive coverage, you can add gap insurance with the same insurance company. Some auto insurers may offer stand-alone gap insurance policies, though this is less common.

Another potential way to get gap insurance in Michigan is through your auto loan lender, which is typically a bank, credit union, or other financial lender. For example, Michigan First Credit Union offers auto loans and gap insurance coverage. To qualify for credit union products, you typically need to become a member and meet certain eligibility requirements.

Best gap insurance companies in Michigan

Many car insurance companies offer gap insurance, but some don’t. For example, State Farm and GEICO — two of the nation’s largest auto insurers — don’t offer gap insurance. Make sure you check with your current insurer to see whether it provides it.

Here are three of the best car insurance companies offering gap insurance for Michigan drivers.

Auto-Owners

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IQ Score
The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-five scale. The Insurify editorial team researches insurer data to determine the final scores.
4.3
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
834
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.
$65/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.
$112/mo

Auto-Owners provides loan or lease gap coverage in Michigan. The company earned an Insurify Quality (IQ) Score of 4.0 out of 5 and offers affordable average liability and full-coverage rates in Michigan. Additionally, Auto-Owners policyholders can save money through numerous available discounts.

Pros
  • High customer satisfaction

  • Multiple discounts

Cons
  • Only available in 26 states

Read our Auto-Owners review
James - May 14, 2024
Verified

Excellent

I'm quite satisfied, I'm just getting a quote from you.

Charles - May 14, 2024
Verified

Average

They're no different than any other company. They give a good price, then start raising your rates.

Duncan - May 11, 2024
Verified

Price Skyrocketed

They had very competitive pricing until 2024, but not after that.

Travelers

Compare personalized, real-time quotes
IQ Score
The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-five scale. The Insurify editorial team researches insurer data to determine the final scores.
4.5
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
818
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.
$156/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.
$269/mo

Travelers offers gap insurance in Michigan and provides a good option for drivers with incidents on their driving record. The company has an IQ Score of 4.2 and offers a number of unique discounts for policyholders to benefit from, including discounts for homeowners, students, and owners of electric or hybrid vehicles.

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 our Travelers review
Dylan - May 22, 2024
Verified

Billing Issues

I signed up to have my bill mailed to me, but I almost never received it. This caused me to be late on payments regularly.

Barbara - May 22, 2024
Verified

My insurance increased from $459 to $788, and then to $888 this year for a 6-month period. What bothered me most was the lack of communication from Travelers. I understand that all insurance companies are for profit, but they should be respectful to their customers. I'm starting to think that all insurance is a scam.

My insurance increased from $459 to $788, and then to $888 this year for a 6-month period. What bothered me most was the lack of communication from Travelers. I understand that all insurance companies are for profit, but they should be respectful to their customers. I'm starting to think that all insurance is a scam.

Kathleen - May 20, 2024
Verified

Good

If you have an old house with prior issues, do not contact them for another issue.

Liberty Mutual

Compare personalized, real-time quotes
IQ Score
The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-five scale. The Insurify editorial team researches insurer data to determine the final scores.
3.9
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
807
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.
$99/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.
$212/mo

Liberty Mutual provides gap insurance in Michigan, as well as a range of other coverage options, including original parts replacement coverage, lifetime repair guarantee, roadside assistance, and more. The company earned an IQ Score of 3.7 and offers discounts for teachers and families.

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 our Liberty Mutual review
Kathryn - May 21, 2024
Verified

Liberty Mutual Insurance Issue

I couldn't bundle home and car insurance because their app was not functioning on my phone.

Sherry - May 21, 2024
Verified

Quick Payment, But Higher Rates

They pay quickly, but then they raise your rates.

Tom - May 20, 2024
Verified

Fair

They raised my rates by $500 last year. I'm 64 years old, I thought my rates would go down.

How Insurify rates car insurance companies

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 Michigan drivers.

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Gap insurance in Michigan FAQs

The following information should help answer any of your remaining questions about finding gap insurance in Michigan.

  • Does Michigan require gap insurance?

    No. Michigan doesn’t require drivers to obtain gap insurance. The state only requires drivers to purchase liability and personal injury protection (PIP) coverage.[4]

  • Why is gap insurance a good idea?

    Gap insurance is a good idea for Michigan drivers financing or leasing a new vehicle. If you experience total vehicle loss, gap insurance covers the gap between your comprehensive or collision insurance payout and the remaining amount you owe on your auto loan.

  • How can you purchase gap insurance in Michigan?

    You can purchase gap insurance in Michigan from an insurance company or credit union that offers this type of coverage. If you’re buying a new car, your dealership may also offer you this type of coverage. You can compare the best rates and find gap insurance that meets your needs.

  • What are some companies that offer gap insurance in Michigan?

    If you’re looking for gap insurance in Michigan, you can check out insurance companies like Auto-Owners, Travelers, and Liberty Mutual. Compare prices and review multiple options.

Sources

  1. Consumer Financial Protection Bureau. "What is Guaranteed Auto Protection (GAP) insurance?."
  2. Insurance Information Institute. "What is gap insurance?."
  3. Insurance Information Institute. "Auto insurance basics—understanding your coverage."
  4. Michigan Department of Insurance and Financial Services. "What auto insurance coverage do I have to purchase?."
Melanie Lockert
Melanie Lockert

Melanie Lockert is the founder of the blog and author of the book, "Dear Debt." Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Allure, Business Insider, Credit Karma, Fortune, and more. She is also the co-founder of the Lola Retreat and host of the Mental Health and Wealth show podcast. She lives in Los Angeles and enjoys jazz music, traveling, coffee, and spending time with her two cats and partner.

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.

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