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Montana drivers who lease or finance a new vehicle should consider adding gap insurance to their overall coverage. Gap insurance can protect you financially if your car is stolen or you’re in a car accident and your vehicle is totaled.
Finding a policy is easy with Insurify. You can compare the best rates from multiple providers for car insurance policy quotes with and without gap insurance. Best part? It takes two minutes and it’s easy, free, and secure.
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Table of contents
- Best Companies for Gap Insurance in Montana
- What is gap insurance?
- Who should buy gap insurance in Montana?
- Montana Gap Insurance Laws
- How much gap insurance do I need in Montana?
- How Gap Insurance Works in Montana
- How Much Gap Insurance Costs in Montana
- How to Buy Gap Insurance in Montana
- Frequently Asked Questions: Gap Insurance in Montana
Best Companies for Gap Insurance in Montana
Do you need gap insurance in Montana?
Drivers in Montana are not required to carry gap insurance. However, if you lease your vehicle, your lender might require you to purchase gap insurance coverage. Even if your lender does not require you to have gap insurance, it is strongly recommended that lessees purchase this type of coverage to remain fully protected.
In Montana, Travelers insurance company offers the lowest average monthly cost of gap insurance, at $130 per month. Also, Midvale and Nationwide are affordable choices, both providing gap insurance for less than $200 per month.
|Insurance Company||Average Monthly Cost for Leased Cars in Montana|
|Midvale Home & Auto||$151|
See More: Cheap Car Insurance in Montana
What is gap insurance?
Gap insurance isn’t like liability insurance that you get with a full-coverage policy. Instead, it’s an insurance product that protects you if your car is a total loss or stolen. It can pay off your vehicle loan (minus your deductible) if your auto insurance doesn’t cover the total amount of the loan. You see, vehicles depreciate over time, losing value every year.
An accident that totals your car can result in you owing more on the loan than the car is worth. But gap insurance fills the gap. “Gap” stands for “guaranteed asset protection.” It protects you from owing more money on your loan than you receive in a claim.
Typically, claims are paid on an "actual cash value" basis, meaning the insurance company gives you the vehicle's value the day it was totaled. If your car depreciated significantly, you may still owe thousands more than the claim paid you.
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Who should buy gap insurance in Montana?
Gap insurance is a type of coverage for certain Montana drivers. It isn’t the right fit for you if you pay cash for a vehicle. If you buy a car using a sizable down payment, you likely won’t benefit from gap insurance coverage, either. Gap insurance can be helpful if you’re leasing a new car or financing one with an auto loan.
Consider gap insurance if:
Your lender requires it.
You’re leasing your vehicle.
You financed your vehicle loan over 60 months or more.
You put less than 20 percent down on your car (or didn’t make a down payment at all).
Your loan has a high interest rate.
You rolled over negative equity from your last auto loan.
You’re driving a luxury vehicle or other high-value vehicle that depreciates faster than a standard car.
Montana Gap Insurance Laws
Montana laws mandate the purchase of car insurance. Drivers typically need minimum liability coverage for bodily injury and property damage liability. But the state’s insurance requirements don’t include gap insurance. On the other hand, some dealerships and banks may require the lessee or borrower to take out a gap insurance policy.
How much gap insurance do I need in Montana?
Although Montana residents do not have to buy gap insurance when purchasing a new car or lease, it makes sense in many situations—but you need to know how much coverage you need.
When you buy gap insurance, make sure the policy covers the total value of the loan or lease regardless of the vehicle's age. Otherwise, you could be on the hook to pay the difference between the outstanding loan balance and the insurance claim settlement.
See More: How Much Car Insurance Do I Need?
How Gap Insurance Works in Montana
Gap insurance is a type of insurance you can buy in addition to liability insurance, collision coverage, and comprehensive coverage. While collision and comprehensive can pay to repair your vehicle damage, gap insurance is coverage for the loan itself—it’s specific to a total loss of the car rather than repairable damage.
Suppose you lived in Missoula and had an accident that totaled your new car. In this scenario, your loan balance at the time of the accident might have been $20,000, but your vehicle may be worth only $15,000. Your auto insurance company covers the value of that car, not the loan balance. But gap coverage will pay the difference.
How Much Gap Insurance Costs in Montana
Car insurance that includes gap insurance in Montana costs an average of $348 per month. The average cost in the U.S. is $289, so Montana drivers pay nearly $60 per month more than the average American.
Of course, the actual amount you pay will be relative to the price of your new car lease or purchase. The more expensive the car, the more the insurance can cost. But unlike a typical auto insurance policy, gap insurance doesn’t use your driving record to calculate your premiums.
See More: Average Cost of Car Insurance in Montana
How to Buy Gap Insurance in Montana
Buying gap insurance in Montana is as easy as asking for it. If you are working with a dealer or lender, they may offer it as an agreement option. But remember that gap insurance is an extra cost—it doesn’t come standard with an auto loan or lease.
However, you can also buy gap insurance through Montana car insurance providers or your insurance agent. You may even pay less when you buy it through an insurer rather than the dealership or lender. It’s convenient because you can bundle it with your existing policy.
To get a jump-start, use Insurify to compare quotes for gap insurance. Answer a few questions about your car and driving history, and Insurify will do all the shopping around for you, even getting you quotes from top insurance companies like Allstate, Progressive, and GEICO.
Frequently Asked Questions: Gap Insurance in Montana
No, the state of Montana does not require drivers to buy gap insurance. However, Montana residents must have the state minimum coverage for liability protection. Your dealer, lender, or financial institution may require gap insurance in the terms of purchase.
Typically, Montana residents will not receive a refund of gap insurance premiums if they pay off the car early. This is because car dealers and lenders include the cost in the agreements and cannot be amended. However, if you paid your premiums up front and paid your loan off early, you may be entitled to a partial credit.
Luckily, Montana drivers have a secret weapon to find the cheapest gap insurance: Insurify! Insurify’s comparison tool searches for the cheapest car insurance rates from the best car insurance companies. To start, answer a few questions about yourself and your car, and Insurify provides a selection of plans immediately. Try Insurify’s streamlined car insurance comparison now.
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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 Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.