Compare Cheap Gap Insurance Companies in Texas: Quotes, Discounts (2022)

Insurify Staff

By: Insurify Staff

Last Updated February 1, 2022

Quick Facts

  • The cheapest insurer we found for gap insurance in Texas is Progressive, with average monthly premiums of $151.
  • Drivers in Texas who lease their cars are usually required to have gap insurance.
  • Drivers who pay off their loans on their car early may be reimbursed for gap insurance.

A typical auto insurance policy includes a range of options to consider, but many Texas drivers aren’t aware that they can purchase gap insurance for their vehicle as well.

Sold by car dealerships and insurance providers alike, gap coverage can make a huge difference in your pocketbook should you get involved in a collision or if your car is stolen.

Motorists interested in exploring gap insurance along with other aspects of auto coverage can find the best policy for their needs with Insurify. By answering a few simple questions, you’ll be able to view real-time quotes in a matter of minutes. Before you start shopping, let’s learn more about how gap insurance coverage in Texas works.

Best Companies for Gap Insurance in Texas

If you’re trying to keep your expenses down and don’t want to add pricey gap insurance to your budget, there is a wealth of options for Texans. Depending on your vehicle, you may be able to obtain robust coverage, including gap protection, at some of these price points:

Texas Insurance CompanyMonthly Premium for Leased Cars
Progressive$151
Clearcover$165
TSC$198
Travelers$200
Safeco$211

Check out our piece on the best gap insurance companies for more information!

What is gap insurance?

The moment you drive a new vehicle off the lot, it begins to depreciate. Most drivers with an auto loan end up with a loan balance that’s greater than the car’s actual cash value for at least a few years. If you get into an auto accident and have gap insurance, this coverage will help to pay off your loan by providing funds beyond the claim payment you receive from your insurer.

In most cases, a gap insurance policy is only available for new cars financed through an auto loan. Lenders in some states may require you to enroll in this protection, but in many instances, it’s optional. If you purchase this protection from a bank, it may be referred to as a gap waiver, although the way a gap waiver works is the same as gap coverage.

Who should buy gap insurance in Texas?

Although gap insurance isn’t required in Texas, it’s a smart purchase in a variety of situations. Drivers who are purchasing a vehicle less than three years old are often encouraged to enroll in this protection. And so are individuals who drive often, because this tends to depreciate your vehicle faster than average and also places you at a higher risk for a serious collision.

Individuals who trade in an older car for a new one may sometimes bring negative equity into their new purchase—that is, they owe more on their trade-in than it’s actually worth. This negative equity increases the amount of your new loan and can make gap coverage an even more desirable option, depending on your financial situation.

It’s also recommended that motorists who are leasing a vehicle purchase gap coverage in the event of a total loss so that they won’t be held liable for continued monthly payments even after the vehicle is long gone. Gap insurance may cost a bit more on your insurance policy, but it can save drivers thousands of dollars should a major collision occur.

See More: Cheap Car Insurance in Texas

Texas Gap Insurance Laws

Texas residents who purchase a new car cannot be required to enroll in gap insurance as a condition of approval for their car loan. Gap coverage is a popular option, however, and must be obtained in conjunction with both comprehensive coverage and collision insurance when acquired through an insurer, as it’s not designed to act as a stand-alone type of protection.

Should a motorist decide that gap coverage is right for them, Texas law states that the cost of such coverage cannot exceed 5 percent of the vehicle loan amount. If you are leasing a vehicle, the cost cannot exceed 5 percent of the adjusted capitalized cost of the vehicle. Drivers have 30 days from the date of enrollment to cancel the coverage and receive a refund if they desire.

How much gap insurance do I need in Texas?

Unlike auto insurance, which allows you to select various coverage limits and deductibles, gap insurance works a bit differently. Drivers don’t get to select how much coverage they enroll in due to the way this type of protection works. Texans will find that the price points for gap coverage vary between insurers, but each quote should be for the same level of coverage.

It’s recommended that you price shop before you enroll in gap coverage and make sure to carefully explore the details of the protection before you make a purchase. Some gap policies offer refunds under certain circumstances, while others require you to pay toward this coverage for the life of your auto loan.

How Gap Insurance Works in Texas

Short for “guaranteed asset protection”, gap coverage can be a financial lifesaver for many Texas drivers. The value of your vehicle is almost always less than the payoff amount for the first several years of your loan, and if you suffer a total loss, you may be responsible for covering this negative equity, or the difference between what you owe and what the vehicle is worth.

Aptly named, gap protection covers this gap between the value of your car and the remaining balance of your loan. While insurance pays you for the value of your car after depreciation, a total loss of the vehicle may mean you’re still responsible for many months of payments on the auto loan. A gap insurance claim bridges this difference, which can be thousands of dollars.

How Much Gap Insurance Costs in Texas

Just like car insurance coverage may vary in price, gap insurance can also be purchased at various price points. Protection from auto insurers may be rolled into your full-coverage monthly premium, while dealerships often include the gap insurance cost in your loan balance, meaning that if you have a high interest rate, you may pay more for this coverage.

It’s best to find a policy that offers a balance between great protection and a great price. Some drivers find that if they make minor adjustments to their deductibles and collision coverage limits, they can easily afford a new policy that includes adequate gap insurance. Ultimately, only you know how much room is in your budget for this type of monthly payment.

See More: Average Cost of Car Insurance in Texas

How to Buy Gap Insurance in Texas

Texans have the option to enroll in gap insurance as an add-on through a dealership or with an insurance company; however, there are some factors to consider before you complete your purchase. Gap insurance is probably ideal if you put a small down payment on your car, if it has a fast depreciation rate, or if your loan will span for 48 months or more.

Buying gap insurance in Texas involves more than just clicking a few buttons on your computer, as it’s a purchase you really want to carefully explore. Ask yourself whether you’d be able to continue making your car payments for months on end even if your car was completely totaled and you had to purchase another or whether you’re comfortable hitting the road without this type of protection.

Ultimately, before you enroll in the first policy you come across, your best bet is to visit Insurify and compare car insurance quotes that include gap insurance as part of your full coverage. You’ll be able to view a range of options and enroll with your new auto insurance company online in just a few minutes, saving you time and money and offering you peace of mind.

See More: How Much Car Insurance Do I Need?

Frequently Asked Questions

  • Texas state law does not require drivers to purchase gap coverage, although many find it to be a smart option to add to their auto insurance policy. Drivers can purchase this protection to bridge the difference between their loan amount and the value of the vehicle should they suffer a total loss after an accident, which can sometimes be thousands of dollars.

  • Motorists who pay for their gap coverage in advance may be entitled to a refund after they pay their loan amount in full. If you are making a monthly payment for your gap protection, you will not receive a refund once you pay off your vehicle. It’s best to check with the company that issued your gap protection to clarify what refund options are available to you, if any.

  • You don’t have to waste time calling gap insurance companies for quotes, as Texan drivers have a much easier solution available to them. By visiting Insurify, you can compare prices from multiple auto insurance companies and find the best policy for your gap coverage needs. View available discounts for drivers in your area and save on the coverage that works for you.

  • The car insurance quotes displayed are based on an analysis of Insurify’s database of over 40 million quotes from 500 ZIP codes nationwide. To obtain representative rates, Insurify’s data science team performs frequent comprehensive analyses of the factors car insurance providers weigh to calculate rates including driver demographics, driving record, credit score, desired coverage level, and more.

    Insurify’s analysis also incorporates the Insurify Composite Score (ICS) assigned to each insurance provider. The ICS is a proprietary rating that weighs multiple factors reflecting the quality, reliability, and health of an insurance company. Ratings used to calculate the ICS include Financial Strength Ratings from A.M. Best, Standard & Poor’s, Moody’s, and Fitch; J.D. Power ratings; Consumer Reports customer satisfaction surveys and customer complaints; mobile app reviews; and user-generated company reviews. 

    With the above insights and ranking methods, Insurify is able to offer car insurance shoppers insight into how various insurance providers compare to one another in terms of both cost and quality. Note, actual quotes will vary based on unique attributes including the policyholder’s driver history and their garaging address.

Insurify Staff
Insurify Staff

Insurance Writers

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