If you’ve ever been in a car accident, you know how stressful it can be to deal with the aftermath. From repairs to medical bills to insurance claims, there’s a lot to manage. One thing that can add to that stress is if you owe more on your car than it’s worth, which can happen if you’ve recently financed or leased a vehicle. That’s where gap insurance comes in.
Gap insurance is a type of coverage that can protect you from owing more than your car is worth in the event of a total loss. If your car is totaled in an accident or stolen, your insurance company will typically pay out the actual cash value of the vehicle. However, if you owe more on the car than it’s worth, you’ll be left with a gap between what you owe and what the insurance company pays out. Gap insurance covers that difference, so you don’t have to pay out of pocket.
While many car insurance companies offer gap insurance, not all policies are created equal. To help you find the best gap insurance company for your needs, we’ve compiled a list of some of the top providers.
- Travelers Insurance: Travelers Insurance is our top pick for the best gap insurance company. Their premiums are generally affordable, and they have fewer customer complaints than average. For approximately 5% of the car’s comprehensive and collision insurance premium, customers can add loan/lease gap coverage. Only vehicles purchased directly from a new auto dealer are eligible.
- The Hartford: The Hartford offers gap insurance that must be added to your coverage within the first 30 days after buying or leasing the vehicle. This can be an especially good option for AARP members, as The Hartford is known for its discounted AARP rates and for coverage tailored to senior citizens.
- Liberty Mutual: If you already have an auto policy with Liberty Mutual, their gap insurance may be a suitable option for you, despite the fact that it can be pricier than other providers, with an average cost ranging from $5 to $15 per month.
- Progressive: Progressive is the third-largest car insurance company in the United States and offers gap insurance that can be added to collision and comprehensive coverage. Their gap insurance is limited to 125% of your vehicle’s actual cash value and may or may not cover your deductible, depending on your claim.
- Allstate: Allstate offers gap insurance in most states, and their coverage is available for vehicles worth up to $100,000, with covered losses limited to $50,000. Allstate’s gap insurance also covers deductibles up to $1,000, which can reduce your out-of-pocket expenses in the event of a total loss.
- American Family: American Family offers gap insurance to customers in 19 states, but you must first have an auto insurance policy with American Family that includes collision and comprehensive coverage.
- Amica: Amica is one of America’s few major providers to offer gap insurance. Their coverage works like the gap insurance offered by other companies listed here, covering the difference between the value of your vehicle and the amount you owe on it.
- Nationwide: Nationwide is another major insurance provider that offers gap insurance. Their coverage can cover deductibles, theft, total loss, and negative equity.
When considering gap insurance, it’s important to compare policies from different providers to find the coverage that best fits your needs and budget. Keep in mind that gap insurance is usually only necessary if you owe more on your car than it’s worth, so if you own your car outright or owe less than its value, you may not need this coverage.