Gap insurance is only needed for one to three years, or until your vehicle is worth more than what you still owe on your loan or lease. Read about car insurance between Geico and State Farm to find out which company sells the right GAP coverage for you. Gap insurance pays off when you owe more on your car loan or lease than the car is worth. This also comes into play anywhere else where you can get auto financing and emergency insurance at the same time, including banks and credit unions.
If your new vehicle is declared a total loss due to damage or theft, you may owe more for your car loan than the insurance company is willing to pay. This information may be different from what you see when you visit the website of an insurance provider, insurance agency, or insurance company. You won't need it if you're a full owner of your car or if you've paid your loan below the value of your vehicle. That said, many major insurers offer affordable GAP insurance coverage that will cost you much less than similar options from a dealer or bank.
We recommend that you start your search by looking for options from Progressive, Geico and Allstate, as these are some of the largest auto insurance companies in the United States by market share. Emergency insurance from a car dealer usually costs much more than coverage from an insurance company, bank, or credit union, and the cost is generally added to the balance of your loan, meaning you have to pay interest on it. To determine if you already have GAP coverage, check your loan or lease agreement or check your insurance policy. For example, if your car is declared to be a total loss and you owe more on your loan than the vehicle is worth, GAP insurance goes into effect and pays what's left.
If you're thinking about buying emergency insurance, be sure to compare the details of coverage and coverage insurance prices with your other options. The amount of time you need to pay for GAP insurance depends on how quickly your car depreciates. If your vehicle loses value quickly, you should keep GAP coverage longer. GAP coverage isn't required if you're financing a car, but it's recommended until you pay off the loan.
Start comparing car insurance rates online with as many companies as possible to find the best GAP coverage for your car.