Gap Insurance in North Carolina (2024)

Auto insurers in North Carolina sell gap insurance as an additional product that offers protection when financing a vehicle.

Athena Valentine Lent
Athena Valentine Lent

Athena Valentine Lent is a finance columnist for Slate and the author of Budgeting for Dummies (Wiley, 2023). Her writing has appeared in BuzzzFeed, The College Investor, GOBankingRates, Money Under 30, and Keeper Tax among other places. Her personal finance blog, Money Smart Latina, won the Plutus Award for "Best Personal Finance Content for Underserved Communities" in 2020 and was nominated for "Blog of the Year" in 2022. When not working she can be found with her main man, a polydactyl cat named Harrison George. 

Katie Powers
Edited byKatie Powers
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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Updated July 25, 2024

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Gap insurance is additional auto insurance coverage that can cover the difference between the actual cash value of your car and the amount left on an auto loan for your totaled vehicle. If you have an auto loan or lease, you can benefit from purchasing gap insurance. Without this coverage, you’d have to pay out of pocket for a car you can’t drive anymore.

When shopping around for coverage, you should consider average premiums and available coverage options. Here’s what you need to know about purchasing gap insurance in North Carolina.

Quick Facts
  • The state of North Carolina doesn’t require gap insurance coverage, but your lender might.

  • Gap insurance isn’t the same as new car replacement insurance.

  • Liberty Mutual, Allstate, and Nationwide offer some of the cheapest gap insurance coverage in North Carolina.

What is gap insurance, and how does it work?

Gap, or guaranteed asset protection, insurance is a product you can buy from an insurance company or car dealership that covers the difference between your vehicle’s value and the remainder of your loan if you have an auto accident that totals your vehicle.

If you total your car, your car insurance company should reimburse you for the amount your vehicle is worth if you file a collision or comprehensive coverage claim. But if you’re financing your vehicle, the amount your car is worth will likely differ from the remainder of your loan if you have an auto accident resulting in total loss for your vehicle.

Depreciation hits a car as soon as you drive it off the lot, which is why gap insurance is important if you don’t want to owe an additional sum if something happens that’s out of your control.

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What gap insurance covers in North Carolina

North Carolina gap insurance covers the difference between your vehicle’s actual cash value (ACV) — based on its current market price — and the amount you still owe on your car loan if you total your car or someone steals it. Gap insurance doesn’t cover medical bills incurred as a result of an accident or the replacement of another party’s vehicle.

Let’s say your current vehicle is worth $12,000 and you still owe your auto lender $15,000. If an accident totals your vehicle and you have collision coverage, your insurer will reimburse you $12,000. Gap insurance will kick in and pay the remaining $3,000 of the loan amount to cover both you and your auto lender.

A common misconception about gap insurance is that it’s too expensive or sold only through your lender. Gap insurance is affordable, and you can purchase it through your auto insurance company or a third-party company.

Gap insurance vs. full coverage

Full-coverage insurance is a type of insurance that includes the state’s minimum-required liability coverage plus comprehensive and collision coverages.

Comprehensive coverage can help pay for damages caused by severe weather, such as hail or lighting, and non-collision events, like fire, vandalism, or theft. Collision insurance covers the cost of repairs should your car be in an accident with someone else. These coverages don’t pay for any amount of money you still owe a lender after the initial insurance payout.

Gap insurance covers the remaining amount you still owe. Even if you have full coverage, you should buy gap insurance. Some lenders or financial institutions may even require it, depending on the terms and conditions of the auto loan.

Learn More: Gap Insurance on Used Cars: Do You Need It?

Learn More: Gap Insurance on Used Cars: Do You Need It?

Who needs gap insurance in North Carolina?

The state of North Carolina doesn’t require gap insurance, but a car lender likely will require you to maintain the coverage during your loan period.[1]

You can buy this coverage from your insurance company as a stand-alone or add-on policy, but some insurers don’t sell it. Car dealerships also sell gap coverage, though it may cost more than buying it from your insurer because you’ll be paying interest on it.

You should purchase this coverage if any of the following apply to you and your vehicle:[2]

  • Made less than a 20% down payment

  • Financed your vehicle for 60 months or longer

  • Have a vehicle lease

  • Purchased a vehicle that depreciates quickly

  • Rolled negative equity over from an old car loan

How to buy gap insurance in North Carolina

During your vehicle’s initial financing, you can purchase gap insurance through a lender. You can also purchase it as an additional insurance policy through a car dealership or your auto insurance company.

You can purchase gap insurance only if you have an auto loan or lease and meet other lender requirements.

Best gap insurance companies in North Carolina

Not all insurance companies sell gap insurance, so make sure you look into coverage options when comparing multiple quotes.

Here are three of the cheapest car insurance companies in North Carolina for this type of coverage, and their average car insurance rates in the Tarheel State.

The below rates are estimated rates current as of: Monday, July 1 at 12:00 PM PDT
Insurance CompanyIQ 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.
Full CoverageLiability Only
Liberty Mutual8$183$50
Nationwide9$63$41
Allstate9$86$56
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.
  • Our editorial team spent more than 350 hours developing the Insurify Quality (IQ) Score and scoring insurance companies. The IQ Score objectively analyzes and calculates a score for insurers using more than 15 crucial criteria. The team weighted criteria by importance to the consumer — factors such as customer reviews and affordability influence the score more than availability and third-party ratings.

    We rate each company on a 1 to 10 scale based on five categories: financial ratings, customer satisfaction, affordability, customer support and transparency, and availability. Insurify updates ratings once a year or as more recent information becomes available.

    • Third-party financial ratings: Insurify uses data from AM Best, S&P, Moody’s, and more to compare insurance companies’ credit and ability to pay out future claims.
    • Customer satisfaction: To calculate this score, Insurify analyzed more than 28,000 customer reviews across 155 car insurance companies. We also consider third-party ratings from J.D. Power, the National Association of Insurance Commissioners, and Trustpilot.
    • Affordability: Our data scientists analyzed more than 90 million real-time auto insurance rates from our partners across the U.S., as well as available discounts, to calculate an affordability score.
    • Customer support and transparency: This measures coverage options, ease of claims filing, and the insurer's transparency surrounding discounts, coverages, and claims process.
    • Availability and reach: Insurify scores availability and reach by identifying the number of states in which insurers offer coverage and company size by market share.

Liberty Mutual

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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.
$50/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.
$183/mo

Liberty Mutual is one of the best insurers for gap insurance in North Carolina. In addition to gap coverage, Liberty Mutual also offers new car replacement insurance, which has a distinct difference but can provide additional financial protection when purchasing a vehicle.

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
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.

Allstate

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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.
$56/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.
$86/mo

If you’re the original loan or leaseholder of your vehicle, you can purchase loan/lease gap coverage through Allstate for a new vehicle. Allstate encourages drivers with collision and comprehensive coverage to also purchase gap insurance products for their vehicle and for additional payoff coverage for a qualifying covered loss.

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
Michael - July 25, 2024
Verified

Extreme Increase without Warning for Veteran and Professional Driver

There was no warning or reason for the extreme increase in price within one year. There was no warning, no options to change to, and no contact from anyone. Just a new bill with a huge increase. As a veteran and a professional driver who takes the defensive driver's course every year, there is absolutely no reason for the increase.

Justo - July 24, 2024
Verified

Unreasonable Price

To me, everything is okay with Allstate except for the price of coverage.

Debra - July 24, 2024
Verified

Your prices are way too high. You need to cut it

I think your coverage for a single vehicle policy is too high.

Nationwide

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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.
$41/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.
$63/mo

Nationwide also sells gap insurance as an add-on their customers can enjoy to help them feel safe on the road. If someone steals your vehicle and your insurance settlement for your vehicle’s ACV is less than what you still owe, gap insurance can cover the remaining amount.

Pros
  • Numerous discount and savings opportunities

  • SmartRide (for safe drivers) and SmartMiles (for low-mileage drivers)

Cons
  • Not available in every state

  • Some discounts and programs not available in all states

Read more driver reviews of Nationwide
Charles - July 24, 2024
Verified

Average

I don't like the available billing options.

Valerie - July 24, 2024
Verified

Great customer service

They care about your needs. They will also try to find the best price rates for you. They also have excellent customer service overall. They are a great company to work with.

Nancy - July 23, 2024
Verified

I paid a lot of money and when I had a minor accident, I sent a photo of the undamaged car I hit. I requested them to investigate it before making a claim on my insurance, but they didn't. They raised my monthly payment to $406 without notifying me of the rate increase or providing any investigation response. So, I switched insurances.

I paid a lot of money and when I had a minor accident, I sent a photo of the undamaged car I hit. I requested them to investigate it before making a claim on my insurance, but they didn't. They raised my monthly payment to $406 without notifying me of the rate increase or providing any investigation response. So, I switched insurances.
  • 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 North Carolina drivers.

Gap insurance in North Carolina FAQs

The following information can help answer your remaining questions about gap insurance in North Carolina.

  • Does North Carolina require gap insurance?

    The state of North Carolina doesn’t require gap insurance. North Carolina drivers only need to purchase the minimum liability limits set by the state, which include bodily injury and property damage liability.[3] But your lender may require gap insurance, in addition to other auto insurance policies, when you purchase your vehicle.

  • What does gap insurance cover in North Carolina?

    Gap insurance in North Carolina covers the gap between your vehicle’s actual cash value and the remainder you still owe on an auto loan if you total your vehicle or someone steals it. Gap insurance doesn’t cover other damages to a vehicle that may leave it unusable, such as an engine repair or other needed service.

  • Is gap insurance worth it?

    Though not required, gap insurance can help provide peace of mind when you purchase a new vehicle. The cost of gap insurance makes sense if your car loan exceeds the value of the vehicle, if you have a minimal down payment, or if you plan on using your vehicle a lot, which results in high mileage.

  • Does gap insurance cover negative equity?

    Gap insurance covers negative equity, also known as the money still owed when a car’s actual cash value is less than the remaining balance left on the vehicle’s loan or lease.

Methodology

Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.

Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).

Liability-only premium averages correspond to policies with the following coverage limits:

  • Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
  • Property damage limits between $10,000 and $50,000
  • No additional coverage
Full-coverage premium averages correspond to the same bodily injury and property damage limits in addition to:
  • Comprehensive coverage with a $1,000 deductible
  • Collision coverage with a $1,000 deductible

Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.

Sources

  1. North Carolina General Assembly. "Article 46. Guaranteed Asset Protection Waivers.."
  2. Insurance Information Institute. "What is gap insurance?."
  3. North Carolina Department of Motor Vehicles. "Insurance Requirements."
Athena Valentine Lent
Athena Valentine Lent

Athena Valentine Lent is a finance columnist for Slate and the author of Budgeting for Dummies (Wiley, 2023). Her writing has appeared in BuzzzFeed, The College Investor, GOBankingRates, Money Under 30, and Keeper Tax among other places. Her personal finance blog, Money Smart Latina, won the Plutus Award for "Best Personal Finance Content for Underserved Communities" in 2020 and was nominated for "Blog of the Year" in 2022. When not working she can be found with her main man, a polydactyl cat named Harrison George. 

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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