In most cases, buying gap coverage at the dealer is the most expensive option. Copyright © 2020 CarInsurance.com. Online Auto and Home Insurance Quotes. It is a subsidiary of Western General, which caters to high-risk drivers. It’s common to have a deductible of between $500 to $1,000 for collision or comprehensive claims. With a history of insuring cars, trucks, and families dating back nearly 100 years, American Family provides an affordable endorsement to cover the gap on auto leases and loans. Availability varies by state, but Allstate’s guaranteed asset protection holds its own when it comes to protecting your finances. Buying gap insurance from a dealership means you’ll pay a hefty mark-up price, according to consumer advocacy groups. Gap insurance usually isn’t needed for the life of the loan. While there are several criteria for rating providers of GAP insurance coverage, the criteria that are most important include price, confidence, customer service, quality and availability of a variety of coverage … Nationwide is another major insurance provider that offers gap insurance. GapDirect is a stand-alone gap insurance provider. See how you can get the best insurance and what impacts your rate. Gap insurance providers include many major car insurance companies, as explained earlier. While choosing the best insurance isn’t always easy, GAP insurance reviews can get you on the right track. You can see why each of these can be considered the best gap insurance providers for 2017. As an example of gap insurance at work, consider John's car, which is worth $15,000. This coverage cost-effectively bridges the out-of-pocket expense gap, created by overlying high deductible health coverage. You can also buy it from the dealership, or from your lender, and have it included as part of your car loan. Can You Cancel Your Coverage? If you’re in one of the 19 states serviced by American Family, consider adding them to your list when shopping for gap coverage. Rating gap auto insurance providers is not the easiest job with so many companies offering the same insurance. Some options cost several hundreds of dollars and car buyers should weigh their needs carefully. Some insurers require you purchase the policy within 12 months of purchase of the vehicle. In general, agreed value policies have been for classical, antique or special vehicles, so it may not be available for your vehicle, thus check with the insurer to make sure your car is eligible if this is something you are eager to have on your vehicle. Gap insurance is a very important type of insurance for you to have if you finance or lease a vehicle so that you will not be stuck paying off your loan out of pocket should you car be totaled or stolen. After the first year, depreciation tends to slow down to about 10% of the car’s original value per year. Yes, but with restrictions and by a different name. You can buy gap insurance from most major car insurance companies, though there are some exceptions. Allstate’s guaranteed asset protection is part of a suite of consumer products sold through authorized dealers nationwide. Is your car insurance provider one of the best car insurance companies in 2020? Updated: June 2020. Let’s look at an example to see how this works. These policies are limited to the terms of your policy and must be purchased with comprehensive and collision. Another option is to buy a stand-alone policy, though there are few companies that do this, GapDirect is one. Gap insurance is an optional car insurance coverage that helps pay off your auto loan if your car is totaled or stolen and you owe more than the car's depreciated value. The loan balance often takes a bit longer to go down. The good news is that you can now purchase GAP Insurance direct online and have GAP protection when you need it most at a price that can save you hundreds of dollars. This may require changing insurers, which comes with its own set of considerations, so ask questions and don’t choose based on price alone. There is no reason to purchase gap insurance if you already have coverage. Congratulations! How much gap insurance costs will depend on where you buy it – it is cheaper to buy from a standard carrier rather than from a bank or dealership. 5. Conclusion – Top Gap Insurance Companies. Gap insurance is a stand-alone policy designed to bridge the ‘gap’ between the amount you paid for your car, and the amount your insurer would pay out in the event of a claim. However, a gap insurance policy can be a valuable coverage option for drivers with new vehicles, as it offers financial protection in the event your car is totaled or stolen. With gap insurance, it’s possible to get a pay out that’s enough for a replacement car. As with car insurance rates, premiums for gap coverage can vary depending on a number of factors. Do Not Sell My Personal Data/Privacy Policy. How GAP insurance works. Michelle is a writer, editor and expert on car insurance and personal finance. Average Car Insurance Rates by State – What Percent Of Your Income Goes Toward Car Insurance? Gap insurance is an additional cost above your regular car insurance and not included in your car insurance policy. GAP is an acronym for Guaranteed Asset Protection, but its name also describes the difference between the amount you owe on a new car loan balance and the amount an insurer will pay in a total loss claim. Benzinga Money is a reader-supported publication. Also, ask your auto lender if it offers coverage. Gap insurance isn't required by any insurer or state, but some leasing companies may require you to purchase it. When choosing coverage through your auto insurer, expect to pay between $5 to $20 additional each month to cover the premium for gap coverage. Typically, however, gap insurance only pays the difference between what is owed and the actual cash value of the car. Check out the best student car insurance here! Learn how gap insurance works and where you can buy this coverage that helps protect you if you total a car that’s financed. It’s well-known that new cars depreciate the minute they are driven off the forecourt. If you’ve purchased gap insurance through the dealer or as a standalone policy, you can cancel your coverage when you no longer need it. GapDirect is offered directly to you by Western General Insurance Company with over 115,000 GAP polices sold since 1994. ACE American Insurance Company, NAIC #22667. You’ll need to have an auto insurance policy with American Family and carry collision and comprehensive coverage for the insured vehicle to qualify for gap coverage. The rankings and listings of our reviews, tools and all other content are based on objective analysis, and we fully own our opinions. While a short-term policy may be cheaper than others, standard plans can be kept until you owe very little money on your loan, which means you get protection for a longer period of time. Disclaimer: The insurance products on CarInsurance.com are from companies from which QuinStreet may receive compensation. All Rights Reserved. The proposed transfer will not change terms and conditions of any policy, except that Lloyd's Brussels will become the insurer and Data Controller in respect of the transferred policies. Many insurance companies will drop gap insurance coverage once a vehicle is more than 2 years old. Insurers only pay the market value if your car is written off or stolen, meaning you could be left out of pocket. Is your teen about to start driving? Stand-alone coverage may let you buy at any time before a loss occurs, GapDirect does. Also, any questions or issues can be quickly addressed with your car insurance agent. While this is a one-time fee, if it’s rolled into the financing, you could be paying interest on the balance for a long time. If a company does not carry all the insurances that it should, or if the amount of insurance is too small, it could have a huge negative impact on the company's finances. For many newer vehicles, particularly those with longer loan terms, the remaining balance could be thousands of dollars. Both loans and leases can be covered with options for 2- or 3-year coverage terms. Gap insurance is most effective for the first few years after the purchase of a vehicle. Commercial GAP. Is the Deductible Covered? 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