Gap Insurance in Ohio (2024)

If your car is stolen or totaled in an accident, your insurance will pay you the actual cash value (ACV) of your car.^[1] In some cases, this might not be enough to entirely pay off your car loan or lease. This is especially true if you owe more on your car than it’s worth.

This is where gap insurance comes in.

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What is gap insurance, and how does it work?

Gap insurance — also called “guaranteed auto protection” insurance — covers the difference between how much your insurance will pay on a specified claim and the remaining balance on your auto loan.

Gap insurance is generally used if your car is stolen or totaled. It’s an optional type of insurance that’s often available when you purchase a vehicle. If you’re leasing a vehicle, some lenders might require it.Gap insurance is not necessary for all drivers. However, you might consider purchasing gap insurance if you’re worried your insurance won’t cover your losses in the event your vehicle is deemed a total loss. You may also purchase gap insurance if you’d have trouble paying for this gap yourself.

What gap insurance covers in Ohio

Gap insurance provides coverage if your car is stolen or totaled and you still have a balance on your loan. It prevents you from having to continue making car payments after your car is gone.

However, gap insurance won’t cover vehicle repairs after an accident unless your insurance company states your vehicle is totaled. It also doesn’t provide coverage for things such as normal wear and tear, mechanical breakdowns, or medical bills if you’re injured in an accident.

When you file a claim, your comprehensive or collision coverage will cover the cash value of your vehicle, minus your deductible. If you’ve purchased gap insurance as an add-on to your policy, it’ll contribute to the amount that’s withstanding on your loan or lease.

But remember that gap insurance only covers the amount remaining on your loan once your insurance company has paid out and you’ve covered your deductible. Some gap insurance policies will only cover you up to a certain limit, so make sure you understand your coverage before purchasing a policy.

Gap insurance vs. full coverage

Full-coverage car insurance in Ohio includes collision and comprehensive coverage. Collision insurance reimburses you for damages if you get in an accident with another car or object. Comprehensive coverage protects you from events like theft, flood, or vandalism.

Gap insurance isn’t included as part of a full-coverage plan. Instead, you can purchase it as an add-on. Gap insurance functions similarly to other optional policies such as roadside assistance or accident forgiveness insurance. If you want to ensure you cover the difference between what you owe on your car loan and the value of your car if it’s totaled, gap insurance might be a useful purchase.

Who needs gap insurance in Ohio?

In Ohio, the minimum requirements for liability insurance include:

• $25,000 per person and $50,000 per accident for bodily injury

• $25,000 per accident for property damage^[2]

Ohio law doesn’t require you to have gap insurance. Instead, it’s an optional form of insurance that you can purchase if you want to. Many lenders will offer gap insurance coverage when you purchase or lease a vehicle. Some may even require it.

However, just because gap insurance isn’t a requirement doesn’t mean you shouldn’t seriously consider it in specific situations.

For example, when you purchase or lease a new car, it starts to depreciate the minute you drive it off the car dealership lot. Within the first year, most cars lose 20% of their value. Within five years, cars can depreciate by 60%. If you’re leasing or financing your vehicle, there’s a chance you’ll owe more than the cash value of your vehicle.

You might benefit from a gap insurance policy if:

• You have a new loan term that has a long payoff period (60 months or longer).^[3]

• You’re leasing a vehicle, and the lender requires gap insurance.

• You put down a small down payment (less than 20%) on a large car loan.

• You’ve purchased a luxury vehicle or a vehicle that tends to depreciate quickly.

• You’ve rolled over negative equity from a previous car loan into a new loan.

• You’ve put on a lot of miles, which can increase the rate of vehicle depreciation.

If you made a large down payment on your car or plan to pay it off within a short period of time, gap insurance may not make sense for you. Similarly, if you purchase a used car, you probably don’t need gap insurance, unless you finance the vehicle.

If you’re considering gap insurance, consult an insurance agent or a lender to get an expert quote.

How to buy gap insurance in Ohio

When buying a new vehicle, the dealer may offer gap insurance. You can also purchase it from most car insurers — typically for less than you’ll pay with a dealer. While it’s possible to purchase gap insurance as a stand-alone policy, many insurers offer it as an add-on to your existing policy.

If you’re trying to keep your monthly auto insurance premiums to a minimum, you might not consider gap insurance. However, adding gap insurance to a collision and comprehensive policy only increases your annual premium by about $20, according to the Insurance Information Institute (III).^[3]

The price of gap insurance goes up if you purchase it as an add-on to your car loan. You can expect to pay a one-time flat fee instead of yearly payments, which can range from $500 to $700.

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Best gap insurance companies in Ohio

Here are some of the top gap insurance companies in Ohio.

Auto-Owners

Midvale Home & Auto

Liberty Mutual

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 Ohio drivers.

Gap insurance in Ohio FAQs