How does gap insurance work in New York?

Gap insurance in New York works the same as it does in any other state. You’ll typically buy the coverage when you purchase a car that you’re financing or when you lease a vehicle.In case of a total loss due to an accident or theft, gap insurance in New York will pay the difference between your insurance settlement amount and your loan or lease balance. Depending on the insurer, the gap payout amount may be limited.

Is gap insurance a good idea?

It depends. If you owe more on your vehicle than its actual cash value, gap insurance is a good idea. New York insurance law doesn’t allow lenders to require you to buy gap insurance. They can (and typically do) require you to buy a full-coverage policy.Since you’re already paying for full coverage, it makes sense to spend a bit more to protect yourself from a big bill if your vehicle is totaled or stolen.

Does GEICO offer gap insurance in New York?

No. GEICO doesn’t currently offer gap insurance — in New York state or anywhere else. If you have GEICO for your full-coverage car insurance policy, you’ll have to look elsewhere for gap insurance.

Do you need gap insurance for a used car?

More than half of all used car purchases are financed in the U.S. Vehicles depreciate the most — as much as 20% — during the first year. But you may still end up owing more than your used car’s actual cash value.If you took a long repayment term, put little or no money down, or financed at a high interest rate, it could be a good idea to buy gap insurance for your used car.

Gap Insurance in New York (2024)

How it works
Best companies
What it covers
Gap vs. full coverage
Who needs it?
Cost in NY
FAQs

How it works
Best companies
What it covers
Gap vs. full coverage
Who needs it?
Cost in NY
FAQs

If someone steals or totals your financed or leased vehicle in New York, you’ll be responsible for paying off any outstanding loan balance. Since cars lose value quickly, your full-coverage insurance payout could be less than what you owe on your vehicle.

Gap insurance can cover any difference between your claim payout and loan balance. But in New York state, it’s up to you to take the initiative to buy it.

State laws don’t require auto loan companies to offer gap insurance when you finance a car. And the state bars lenders from requiring you to buy gap insurance as a condition of getting a loan.^[1]

Here’s what you need to know about buying gap insurance in New York.

Quick Facts

Adding gap insurance to an existing policy with collision and comprehensive coverage typically only increases your annual premium by about $20, according to the Insurance Information Institute.
You can either buy gap insurance from a dealership or an insurance company.^[2]
You’ll likely need to provide a police report and your lease or loan documentation in order to file a gap insurance claim.

What is gap insurance, and how does it work in New York?

A vehicle is a depreciating asset. Its actual cash value decreases as you drive it. If its value goes down faster than your loan balance, you may owe more than the car is worth — a situation known as negative equity. Negative equity can occur if you took out a loan for more than five years or didn’t put enough money down.

Car insurers base claims payout amounts on what vehicles are worth at the time of an accident. And they’ll pay it to your lien holder, not you.

If someone steals or totals your car, your insurance settlement may not be enough to pay off the full remaining balance on your loan. Gap insurance — also called guaranteed asset protection — repays any loan balance remaining after your auto insurance policy pays.

New York state law requires lenders and leasing companies to tell you in writing if they’ll hold you responsible for your full loan balance in case of a total loss.

Best gap insurance companies in New York

You have several options to choose from when buying gap insurance in New York. Here’s a list of the best insurance companies in New York that offer the coverage.

Allstate

Compare personalized, real-time quotes

User Reviews	3.1
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

Overview

The Allstate Guaranteed Asset Protection Program is available through some dealers, and you’ll have to add it at the time you buy your vehicle as an add-on to your financing agreement.

You can add Allstate’s gap coverage for loans for both new and used vehicles financed for up to 96 months. In case of a total loss, Allstate will pay your auto insurance deductible (up to $1,000) and up to $50,000 of your loan balance.

Pros and cons

Pros

Available for both new- and used-vehicle purchases
Pays up to $1,000 toward your auto insurance deductible

Cons

Can only add when you buy the car
Must work with a dealer to obtain the coverage

Reviews (2,165)

Liberty Mutual

Compare personalized, real-time quotes

User Reviews	2.8
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.	$190/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.	$276/mo

Overview

Liberty Mutual offers gap insurance, but you can only buy it when you purchase your car, and you only qualify for coverage if you’re the first owner of your car. The company also offers better car replacement and new-car replacement add-ons.

If you total your vehicle in an accident, Liberty Mutual’s better car replacement policy will give you money to purchase a car one year newer with 15,000 fewer miles on it. New-car replacement will pay for the same make and model if your car is stolen or totaled within the first year or before you reach 15,000 miles.

Pros and cons

Pros

May be cheaper if you buy through insurer
Optional insurance products to help buy a new vehicle

Cons

Must buy when you purchase your car
Few details about the coverage on Liberty Mutual’s website

Reviews (1,263)

Donald - July 23, 2024

Verified

Should Have Looked Harder Before Choosing Liberty Mutual

I wouldn't recommend Liberty Mutual to any of my friends. I've been with this company for almost three years, with no accidents or traffic violations since I got my car in April 2019. However, my rates keep going up, despite being 59 years old. I've been researching for better rates and when I find them, I plan to switch immediately.

Terry - July 22, 2024

Verified

Time for a Change

They increased the rate for no apparent reason, which is unacceptable.

Debra - July 22, 2024

Verified

Excellent

They are excellent, just checking options.

…

Nationwide

Compare personalized, real-time quotes

User Reviews	3.3
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.	8.7/10
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.	$85/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.	$186/mo

Overview

Nationwide offers gap insurance that you can easily add to an existing collision insurance policy. Nationwide’s gap insurance coverage is available for vehicles 6 years old or newer.

Pros and cons

Pros

Available for used cars
Can purchase coverage through a Nationwide agent

Cons

Won’t pay your full-coverage car insurance deductible
Not available in every state

Reviews (357)

Progressive

Compare personalized, real-time quotes

JD Power J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.	819
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.	8.4/10
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.	$234/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.	$328/mo

Overview

Progressive doesn’t sell traditional gap insurance. Instead, it offers loan/lease payoff coverage. You can add this coverage to your existing full-coverage Progressive policy on any vehicle you finance or lease. Loan/lease coverage will pay toward your loan or lease balance, but no more than 25% of your vehicle’s value.

Pros and cons

Pros

Can add to your full-coverage policy with Progressive
Many optional add-ons, including roadside assistance, trip interruption, and vehicle protection

Cons

Payout capped at 25% of vehicle value
Payout cap may be less in some states

Reviews (4,223)

Travelers

Compare personalized, real-time quotes

User Reviews	3.5
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.	9.0/10
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.	$382/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.	$538/mo

Overview

Travelers offers loan/lease gap coverage. If you total your vehicle, it covers the difference between the value of your car and what you still owe. Travelers’ gap coverage is only available for new cars, and you must buy your vehicle from a dealer to be eligible for Travelers’ gap product.

Pros and cons

Pros

New-car replacement coverage also available
Get a quote online, through an agent, or by phone

Cons

Not available for used cars
May not be available in every state

Reviews (312)

How to buy gap insurance in New York

The most affordable way to buy gap protection in New York is to call your insurance agent and add the coverage to your existing car insurance policy. You can purchase a stand-alone policy through a car dealership or a lender, but it’s typically cheaper to buy the coverage as an add-on with your car insurance company.

What gap insurance covers in New York

Gap insurance covers the difference between the current value of your car and what you owe on your car. It doesn’t cover any medical bills or car repairs following an accident.

For example: Let’s say you purchase a $30,000 car with a $27,000 loan and drive it for a year before you have an accident that totals your vehicle. You have collision coverage with a $500 deductible.

By the time of your accident, your car has depreciated in value by about 20%, so it’s now worth $24,000. Your collision coverage will pay out $23,500.

You’ve made some payments on your auto loan but still owe $26,000 at the time of your accident. Gap insurance can cover the difference between what your vehicle is worth and your remaining loan balance. In this scenario, your policy would cover the $3,000 gap.

Gap insurance vs. full coverage

Full-coverage auto insurance adds collision and comprehensive coverages to basic liability insurance. The coverages can pay to repair physical damage to your vehicle. Full coverage may also include medical payments coverage.

While you can have a full-coverage policy without gap insurance, you’ll never have gap insurance without full coverage. That’s because lenders and leasing companies typically require drivers to buy full-coverage policies to protect their investment.

Here are key differences between gap insurance and full coverage:

Coverage Type	Pays for	Pays to	Stands Alone?
Full coverage	Cost to repair or replace damaged vehicle, up to policy limit	Insured (in case of repairs) or leasing company/lien holder (in case of total loss)	Yes. You don’t need to buy gap insurance to get full coverage.
Gap insurance	Outstanding loan/lease balance above full-coverage payout amount (limits may apply) in case of total loss	Leasing company or lien holder	No. You can’t buy gap insurance without full coverage.

Who needs gap insurance in New York?

New York law doesn’t require drivers to purchase gap insurance, but your financial institution or dealership might.^[5] Some drivers should consider purchasing gap insurance for more financial protection.

You should consider purchasing gap insurance if you:

Took out a long-term car loan of more than 60 months
Made a small down payment
Rolled negative equity from an old vehicle loan into a new car loan
Have a lease and the auto lender requires it
Have a vehicle known for depreciating quickly

Drivers who made a large down payment or secured a car loan for 60 months or less don’t typically need gap insurance. But drivers who are risk-averse and prefer buying additional coverage can benefit from the confidence and peace of mind gap insurance provides.

Dan Stous, a certified financial planner (CFP), explains that dealerships often try to get you to purchase add-on products that aren’t useful when you’re buying a new car.

“Gap insurance is one of those products that is actually something to consider,” he says. Stous explains gap insurance can also benefit drivers without a lot of personal cash of their own.

Find Cheap Car Insurance in New York

Insurify partners with 100+ top insurers for accurate quotes

Secure. Free. Easy-to-use.

Based on 3,806+ reviews

4.8/5

How much gap insurance costs in New York

The cost of gap insurance in New York will vary based on your driver profile, vehicle type, and insurer. Adding gap insurance to your policy typically costs between $20 and $40 annually, but it can cost more if you buy it separately through a dealership or lender.

You can see the average monthly cost of insurance for leased cars from New York insurers below. The following table shows average full-coverage car insurance rates for leased vehicles covered by top insurers in New York.

Insurance Company	Average Cost for Leased Cars in New York
CSAA	$221
Safeco	$238
Midvale Home & Auto	$305
Liberty Mutual	$313
Progressive	$395
Bristol West	$509
Erie	$532
USAA	$554
Travelers	$647

Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.

Gap insurance in New York FAQs

If you still have questions about gap insurance in New York, the following information should help you decide whether you should buy this coverage.

How does gap insurance work in New York?
Gap insurance in New York works the same as it does in any other state. You’ll typically buy the coverage when you purchase a car that you’re financing or when you lease a vehicle.
In case of a total loss due to an accident or theft, gap insurance in New York will pay the difference between your insurance settlement amount and your loan or lease balance. Depending on the insurer, the gap payout amount may be limited.
Is gap insurance a good idea?
It depends. If you owe more on your vehicle than its actual cash value, gap insurance is a good idea. New York insurance law doesn’t allow lenders to require you to buy gap insurance. They can (and typically do) require you to buy a full-coverage policy.
Since you’re already paying for full coverage, it makes sense to spend a bit more to protect yourself from a big bill if your vehicle is totaled or stolen.
Does GEICO offer gap insurance in New York?
No. GEICO doesn’t currently offer gap insurance — in New York state or anywhere else. If you have GEICO for your full-coverage car insurance policy, you’ll have to look elsewhere for gap insurance.
Do you need gap insurance for a used car?
More than half of all used car purchases are financed in the U.S. Vehicles depreciate the most — as much as 20% — during the first year. But you may still end up owing more than your used car’s actual cash value.
If you took a long repayment term, put little or no money down, or financed at a high interest rate, it could be a good idea to buy gap insurance for your used car.

More cities in New York

More states

Sources

New York State Department of Financial Services. "OGC Opinion No. 08-03-20."
What is GAP Insurance: Everything You Need to Know. "Kelley Blue Book."

Catherine Collins

Catherine Collins is a freelance financial writer and author based in Detroit. She's the co-founder of MillennialHomeowner.com and MomsGotMoney.com, and author of the book Mom’s Got Money: A millennial mom’s guide to managing money like a boss. She has written for US News, Huffington Post, Money, Business Insider, Investopedia, Entrepreneur, Go Banking Rates, and many other publications. She currently resides in Detroit, Michigan with her boy-girl twins and a rescue dog named Julep.

Learn More

Edited byEvelyn PimplaskarEditor-in-Chief, Director of Content

Evelyn PimplaskarEditor-in-Chief, Director of Content

10+ years in insurance and personal finance content
30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

Read Editorial Guidelines

View Full Bio

Featured in