Licensed Realtor with 10+ years in personal finance content
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Daria is a licensed Realtor and resort property manager specializing in personal finance, real estate, and insurance topics. In her spare time, she practices photography.
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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Cheapest recent rates in Texas
Drivers using Insurify have found quotes as cheap as $37/mo for liability only and $65/mo for full coverage in Texas.
*Quotes generated for Insurify users from Texas within the last 10 days. Last updated on July 25, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from July 25, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
*Quotes generated for Insurify users from Texas within the last 10 days. Last updated on July 25, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from July 25, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
Guaranteed asset protection, or gap insurance, is a type of optional coverage that protects you when you lease or finance a car. This type of coverage fills the gap between the amount you owe on the lease or car loan and the car’s actual cash value if the car is stolen or totaled in an accident.
If you’re considering gap insurance coverage, this article is your guide to help you find the best options in Texas.
Quick Facts
Gap insurance will pay your lender or leasing company first if your car is totaled.
Not all gap coverage is insurance. Car dealerships, lenders, and insurance companies may offer non-insurance gap products.
Gap insurance isn’t required in Texas.
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What is gap insurance, and how does it work in Texas?
Gap insurance helps you avoid having to pay for your vehicle loan balance out of pocket because of a shortfall in your collision or comprehensive coverage payout from your insurance provider.
Depreciation quickly reduces the value of most new vehicles, and that depreciation begins the moment you drive the vehicle off the lot. By the end of the first year, your car could be worth 20% less than what you paid for it, according to Kelley Blue Book. Without gap insurance coverage, you could end up thousands of dollars in the hole in the event of a total loss, even if you have a full-coverage auto insurance policy.
That’s because a standard insurance policy only covers the car’s actual cash value, less your deductible, regardless of the purchase price or loan amount. So your insurance payout may be much lower than the amount you still owe on the car.
Important Information
Although gap insurance can save you thousands of dollars if your new vehicle is totaled, keep in mind that the payout will go to reimburse your lender or leasing company. So you may still end up without a car.
What does gap insurance cover in Texas?
Gap insurance covers the difference between the actual cash value of your car and the remaining balance you have on the lease or loan.
For example, you might purchase a car for $30,000 with $3,000 down and a loan of $27,000. The car loses some value by the time you get it home that first day, and it continues to lose value as time goes on. Before long, depreciation will reduce your car’s value faster than your loan payments can reduce your loan principal. At that point, you owe more on the car than it’s worth.
Now imagine that you still owe $25,000 on the car when it’s totaled in a crash, but the car’s actual cash value is now just $23,000. Your standard full-coverage policy will base its claim payment on the $23,000 actual value, which you would then use to pay off $23,000 of the $25,000 loan balance. Gap insurance would then reimburse the lender for the other $2,000.
“One common misconception is that gap insurance only applies to expensive vehicles,” says Maria Coello, a licensed insurance agent and owner of CoxInsure.com, a Dallas insurance brokerage. “In reality, it is relevant whenever an insurance policy pays out an amount lower than the vehicle’s value.”
However, it’s important to note that gap coverage is not all-inclusive. The following exclusions could reduce your claim amount, according to the Texas Department of Insurance:
Past-due payments
Unpaid finance charges, warranty costs, or balloon payments
At a minimum, Texas requires drivers to have 30/60/25 liability insurance, which is $30,000 of bodily injury coverage for each individual, $60,000 of bodily injury total per accident, and $25,000 worth of property damage coverage.
Liability coverage protects you by reimbursing the other driver and the passengers for injuries and damage in an accident you cause. However, it doesn’t pay for damage to your car. For that, you need collision coverage for an accident involving another car or comprehensive coverage for damage caused by perils other than a collision, such as fire, vandalism, or impact with a deer.
Having full coverage means having all three types: liability, collision, and comprehensive coverage. It might also include additional coverages, like medical payments, uninsured/underinsured motorist coverage, and rental reimbursement.
Auto lenders and lessors often require car owners to have full coverage because it protects their investment.[1] While some collision or comprehensive insurance policies include gap coverage, you might need to add it as an optional coverage.
Who needs gap insurance in Texas?
Texas law doesn’t require drivers to have gap insurance, and auto lenders can’t require you to have it, either. However, it’s a good idea “when the limit of an auto insurance policy is insufficient to cover the full cost of the vehicle,” Coello advises.
The vehicle is likely to depreciate faster than normal, whether because of the make and model or because the vehicle is highly customized.
Your loan balance includes a rolled-over balance from your trade-in.
If you’re financing or leasing a car, consult your insurance agent or lender for an expert gap insurance quote.
If none of these situations applies to you, you probably don’t need gap insurance. “If you own your vehicle outright and are not financing it, gap insurance is generally unnecessary,” Coello says.
You can also cancel your gap insurance whenever you want, according to Coello. But the Texas Department of Insurance (TDI) recommends keeping it until you owe less on your vehicle than it’s worth, which typically takes about two years.[2]
Recent Insurify quotes for Texas drivers
Drivers in and around Texas have found policies from Clearcover, Liberty Mutual, Hallmark, and more, through Insurify in the last few days.
*Quotes generated for Insurify users within the last 10 days. Last updated on July 25, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from July 25, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
*Quotes generated for Insurify users within the last 10 days. Last updated on July 25, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from July 25, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
How to buy gap insurance in Texas
Car dealerships and banks usually offer gap coverage when you buy a car. “They typically offer it as an additional coverage option,” Coello says.
However, the TDI warns that not all gap products are insurance. While non-insurance gap programs offer similar coverage, the TDI says that unless your gap coverage is insurance, the department can’t help you if you have a problem with it.[2]
Always check with your insurance company before you buy coverage from a dealer or finance company — it might offer you a better deal.
How much does gap insurance cost in Texas?
How much you pay for gap insurance depends on where and how you buy it. A car dealership might offer it to you as a standalone policy for about $500 per year. You could also buy it through your insurance company as an endorsement to your collision or comprehensive insurance policy. This often costs much less — about $20 per year, according to the Insurance Information Institute.
Best gap insurance companies in Texas
Several Texas auto insurers offer gap insurance as part of collision or comprehensive coverage or as an optional add-on. Coverages and rates can vary widely, so compare the details before you apply.
Here are some of the best Texas auto insurance companies offering gap coverage.
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.
9.3/10
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.
$37/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.
$65/mo
State Farm ranks No. 1 for affordability among companies included in Insurify’s rankings, and it earned an impressive 4.4 Insurify Quality Score. While it doesn’t offer traditional gap insurance, it does include Payoff Protector gap coverage for car loans originated by State Farm Bank.
Pros
High rates of customer satisfaction
Rideshare insurance available
Cons
No gap insurance offering
May not be the cheapest choice for drivers with violations
The initial representative lied to me about the price of the policy. I'm paying $30 more a month than was quoted.
Matthew - July 25, 2024
Verified
Abandoned by State Farm
It was a negative experience. After 15 years with the company, I was dismissed due to two car accidents on my record, both of which had been previously reported as not my fault. They refused to communicate with me afterwards. I would advise others to consider this before choosing State Farm.
Janet - July 25, 2024
Verified
Too High
I have had State Farm for 5 years and have been very happy until this last renewal. My full coverage insurance jumped up by $400. This is why I keep looking for cheaper insurance.
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.
$53/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.
$92/mo
Allstate offers highly competitive rates and has an Insurify Quality Score of 4.1. Its gap coverage, which must be added to your financing agreement when you purchase your vehicle, is available for new and used cars and covers up to $50,000 of your loan balance.
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
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.
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.
$98/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.
$172/mo
Progressive gets high marks for its competitive rates and impressive 4.1 Insurify Quality Score. It offers loan/lease payoff coverage as an add-on to a new or existing policy.
Pros
Rewards for good drivers
Numerous coverage options and discounts available
Cons
Higher-than-expected amount of complaints
Ranked 11 out of 15 companies in the J.D. Power Customer Satisfaction Index Ranking
I've been with them for 10 years, but the rates keep going up. I have liability insurance and it costs $78 a month! I'm on social security and I never drive on the highway. I don't go out of town more than 5 miles a day. I hardly drive at all, just for basic stuff like going to the doctor. That's it. I will try to find a cheaper plan. I just feel that the price is unfair in my situation.
Maureen - July 25, 2024
Verified
Expensive for Seniors Who Drive Less Than 4000 Miles/Year
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.
9.4/10
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.
$66/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.
$116/mo
USAA is a top insurance company with reasonable rates and a 4.5 Insurify Quality Score, making it the highest-scoring Texas insurer rated by Insurify. It doesn’t offer gap insurance, but it does have an assistance program for car replacement that will pay up to 20% more than your car is worth, even if you own it free and clear. Keep in mind, though, that you must be an active-duty member of the military, a veteran, or the family member of a service person or veteran in order to get insurance from USAA.
Pros
Low premiums
SafePilot program rewards good driving with up to 30% discount
Cons
Only available to active-duty military, veterans, military spouses, or children of service members or veterans
A few years ago, a minor male bicyclist collided with my car, which my wife was driving at the time. She was leaving a large intersection with a green light when the bicyclist, who was riding in a pedestrian lane, appeared from behind a stopped box truck that obscured his approach. The local police department in Belmont, MA, was called and the Traffic Control Officer wrote up the accident report, clearing my wife of any responsibility. I forwarded this report to USAA. However, when I applied for increased motor vehicle insurance coverage about a year later, I was denied. USAA cited the accident with the bicyclist as a chargeable accident against my wife, despite the police report, and they had never informed us about this. I was never able to resolve this issue. Another incident occurred on December 14, 2023. I wired $60,000 to USAA for a 7-month CD and received a receipt acknowledgment. However, on the same day, the deposit was withdrawn without any direct notice to me, except for a normal monthly bank statement reflecting the withdrawal without any explanation in mid-January. It took about 9 days for USAA to resolve the issue and return the $60,000. This was a very stressful 9 days for me, and I never received an apology or explanation. Trying to reach someone with authority through numerous phone calls was literally impossible. It took a two-page business letter with 7 enclosures to get the CEO's right-hand woman to take action and return the $60,000 to my credit union. As for insurance rates, we own, register, and insure two cars that are driven about 10 miles per week on average, sometimes 100 miles on a Saturday to visit our daughter. However, it seems that we do not receive any discount for this.
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.
$83/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.
$166/mo
Nationwide rates are somewhat higher than the other insurance companies listed here, but with a 4.1 Insurify Quality Score, it easily ranks as one of the best insurance companies with gap insurance in Texas. You can add gap coverage as an endorsement to your Nationwide auto policy as long as you purchased the car new within the last six months.
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
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.
…
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 this data, Insurify is able to offer drivers insight into how companies price their car insurance premiums. The data included on this page represent averages across ages, genders, credit scores, and driver profiles for Texas drivers.
Find Cheap Gap Insurance in Texas
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4.8/5
Texas gap insurance FAQs
Not all drivers need gap insurance. But for some, it can mean the difference between your car loan being paid off in the event of a total loss and making car payments for a car you no longer own.
Still on the fence about whether you need gap insurance? The following information should help you decide.
Does Texas require gap insurance?
No, Texas doesn’t require gap insurance. What’s more, your lender can’t require it, either. However, the coverage is so inexpensive — about $20 per year when added to your existing auto insurance policy — that most borrowers should strongly consider purchasing it. This is especially true if you purchased your car with a small down payment or rolled the balance from a trade-in into the new loan.
When should you cancel gap insurance?
Gap insurance repays any loan balance that’s outstanding after your collision or comprehensive insurance has paid out your claim to the lender. You don’t need gap insurance once you owe less on your car than it’s worth or have paid off the loan entirely.
Do you need gap insurance if you have full coverage?
If you already have liability, collision, and comprehensive coverage, you may still want gap insurance. Some auto insurance companies include gap insurance as part of their collision and comprehensive coverage. Others, however, offer it as separate, optional coverage. Review your policy or contact your insurer if you’re unsure whether you already have gap coverage.
Do you get money back from gap insurance once you’ve paid off your car?
Possibly. In many cases, it’s possible for you to receive a gap insurance refund if you finish paying off your car loan early. However, this is less likely if you pay off your loan on schedule. Check your policy to better understand your options.
Daria Uhlig is a freelance writer and editor with over a decade of experience creating personal finance content. Her work appears on USA Today, Nasdaq, MSN, Yahoo Finance, Fox Business, GOBankingRates and AOL. As a licensed Realtor and resort property manager, she specializes in real estate topics, including landlord, homeowners and renters insurance. In her spare time, Daria can be found photographing people and places on Maryland's Eastern Shore. Connect with her on LinkedIn.
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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State Farm
Allstate
Progressive
USAA
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