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Whether you’re never caught outside of Philly or are a country mouse in the Alleghenies, driving is essential in Pennsylvania. And if you’re driving a new lease or just got a car loan, you’ll probably need gap coverage for your auto insurance.
Fuzzy on the concept? Read on, and spend a few minutes with Insurify to get a quote list with options from the nation’s top insurance companies. It’s the easiest way to find the best deal, plus, it’s fast, free, and secure.
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Table of contents
- Best Companies for Gap Insurance in Pennsylvania
- What is gap insurance?
- Who should buy gap insurance in Pennsylvania?
- Pennsylvania Gap Insurance Laws
- How much gap insurance do I need in Pennsylvania?
- How Gap Insurance Works in Pennsylvania
- How Much Gap Insurance Costs in Pennsylvania
- How to Buy Gap Insurance in Pennsylvania
- Frequently Asked Questions: Gap Insurance in Pennsylvania
Best Companies for Gap Insurance in Pennsylvania
What companies sell gap insurance in Pennsylvania?
Many auto insurance companies in Pennsylvania offer gap insurance. Travelers offers the cheapest gap insurance on average, but if you choose to purchase gap insurance, check with your insurance provider to see if they offer a gap insurance add-on.
Because gap coverage is part of most auto insurance policies for leased vehicles (along with comprehensive coverage and collision coverage), we put together a list of companies with the most affordable quotes for gap insurance. These companies are a great starting point for finding the auto insurance you deserve that includes gap coverage.
|Insurance Company||Average Monthly Cost for Leased Cars in Pennsylvania|
|Midvale Home & Auto||$189|
See More: Cheap Car Insurance in Pennsylvania
What is gap insurance?
The “gap” in gap insurance stands for “guaranteed asset protection.” The insurance covers the lender on your car loan—they’re guaranteed to get their full loan payment back even if the car is in a car accident or stolen and becomes a total loss. “Wait, you might ask, doesn’t my insurance coverage pay for a new vehicle since I’m required to have full coverage on my policy?”
Enter gap insurance. If your car is a total loss, your full-coverage insurance pays out the actual cash value of your car—but what if that’s not enough to pay off the loan? The lender still wants their money, and you don’t want to pay loan payments on a car that doesn't exist. That’s why gap insurance covers the difference—minus the deductible on your full-coverage policy.
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Who should buy gap insurance in Pennsylvania?
Only buy gap insurance if you need it. You usually only need gap insurance if you bought your new car with a long loan term and a small down payment. Even then, you won’t need gap insurance for the entire loan term—usually only a few years. Most dealerships and lenders require you to have gap insurance.
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.
Pennsylvania Gap Insurance Laws
Gap insurance isn’t required in Pennsylvania. In fact, the state has very low requirements for auto insurance. If you need gap coverage, it’s probably because the finance company that is handling your auto loan—usually a bank, credit union, or dealership—requires you to have it.
How much gap insurance do I need in Pennsylvania?
The amount of gap coverage you need depends on the actual cash value of your car—which is dragged down by depreciation the older it is and the more you drive it—and the remaining balance on your car loan. Some gap insurance coverage stops at 25 percent of your car’s value; some policies stop at 50 percent. Ask your insurance agent what makes sense for you.
See More: How Much Car Insurance Do I Need?
How Gap Insurance Works in Pennsylvania
It’s cheaper to buy gap coverage as part of a car insurance policy—not à la carte in the form of gap waivers, the way lenders and dealerships like to offer it. Policyholders with an auto insurance policy can benefit from the savings that come with using one insurance company for homeowners and car insurance. So adding gap insurance just helps the savings pile up.
How Much Gap Insurance Costs in Pennsylvania
In Pennsylvania, it costs $227 per month on average to insure a leased vehicle with full coverage (liability coverage, collision insurance, comprehensive coverage). That makes Pennsylvania a relatively affordable state: the national average to insure the same vehicle with full coverage is $289 per month.
How to Buy Gap Insurance in Pennsylvania
Lenders and finance companies that finance your car loan will try to sell you gap coverage as well. Take a look, but know it’s not required, and most every driver is better off using an insurance company for their gap coverage. P.S.: A gap waiver is the same thing, and if you have a gap waiver on your loan, you don’t need gap insurance.
When you get a quote from one insurance company, it’s almost never going to be the best rate you could find. The auto insurance landscape is too complex and diverse. To find the gap insurance policy that meets your needs and has the rates that fit your budget, Insurify is the way to go. Instead of one quote at a time, you can get a free list of killer quotes in mere minutes!
Frequently Asked Questions: Gap Insurance in Pennsylvania
While Pennsylvania law never requires you to purchase gap insurance, your lender very often does. Gap insurance coverage is often a mandatory component of most auto loans and leases. Pennsylvania requires liability insurance, including bodily injury and property damage protection, and notably doesn’t require personal injury or uninsured/underinsured motorist coverage.
You can drop your gap insurance the minute your car loan isn’t “underwater” anymore—that is, your loan payments have caught up with the car’s value, and the outstanding balance is less than the car’s actual cash value (ACV). If you’ve paid your gap insurance on an annual basis, you should get your money back prorated. Just notify your insurance company promptly.
Finding the right auto insurance policy for your new car or lease is a critical financial decision. Not only do you need a low rate, but you also need to make sure your policy is high quality. Residents of the Commonwealth, from the Delaware River to Lake Erie, should take advantage of Insurify. Gap insurance or not, you’ll get personalized rates and exclusive deals for free, in minutes.
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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.