Gap Insurance Buyer's Guide
Hopefully this Buyers Guide will help you get the gap insurance you need at a price you can afford.
1. Your car dealer
Buying gap insurance from a car dealer is the most expensive option with an average cost of $578. Gap
insurance sold through a dealer is much like a high priced add on such as Scotch Guarding your upholstery.
2. Your current car insurance company
Purchasing gap insurance, if available, from your current insurance carrier is usually the cheapest way to go
costing only an additional $30 per year.
Here's an example from Travelers Insurance on how the cost of gap insurance is calculated.
Bill Pearse, vice president of auto product strategy and design for Travelers Insurance says "Travelers
calculates gap insurance premiums at roughly 5 percent to 6 percent of the premium for collision and
comprehensive insurance you have on the car. On a $1,400 annual premium, with $420 to $560 of that typically
for collision and comprehensive, gap insurance would cost $20 to $30. And the cost goes down along with the
cost of collision and comprehensive as the vehicle ages."
Although many car insurance companies offer gap insurance coverage as an option, others such as GEICO
and State Farm Mutual Automobile Insurance Co. do not. Please see the Auto Gap Insurance Online section of
this web site for a listing of most of the major carriers who DO offer gap coverage.
If your current insurance company doesn't offer gap insurance it might be an opportune time to re-evaluate your
vehicle insurance coverage and find an insurer able to provide all of your auto insurance needs.
3. Credit Unions
Many credit unions now offer Gap insurance coverage for automobiles at very reasonable rates. For instance,
the Hudson Valley Federal Credit Union of Poughkeepsie, NY, offers gap auto insurance for a one time payment
of $105 which can be spread out over the length of the loan.
A stand alone gap insurance policy from a credit union could be a good option if your current auto insurance
company doesn't offer gap insurance.
Insurance Regulators by State
If you want more information on how your state regulates gap insurance, or have any type of insurance related
issues you can find a direct link to your state's insurance regulator here.
1. Your car dealer
Buying gap insurance from a car dealer is the most expensive option with an average cost of $578. Gap
insurance sold through a dealer is much like a high priced add on such as Scotch Guarding your upholstery.
2. Your current car insurance company
Purchasing gap insurance, if available, from your current insurance carrier is usually the cheapest way to go
costing only an additional $30 per year.
Here's an example from Travelers Insurance on how the cost of gap insurance is calculated.
Bill Pearse, vice president of auto product strategy and design for Travelers Insurance says "Travelers
calculates gap insurance premiums at roughly 5 percent to 6 percent of the premium for collision and
comprehensive insurance you have on the car. On a $1,400 annual premium, with $420 to $560 of that typically
for collision and comprehensive, gap insurance would cost $20 to $30. And the cost goes down along with the
cost of collision and comprehensive as the vehicle ages."
Although many car insurance companies offer gap insurance coverage as an option, others such as GEICO
and State Farm Mutual Automobile Insurance Co. do not. Please see the Auto Gap Insurance Online section of
this web site for a listing of most of the major carriers who DO offer gap coverage.
If your current insurance company doesn't offer gap insurance it might be an opportune time to re-evaluate your
vehicle insurance coverage and find an insurer able to provide all of your auto insurance needs.
3. Credit Unions
Many credit unions now offer Gap insurance coverage for automobiles at very reasonable rates. For instance,
the Hudson Valley Federal Credit Union of Poughkeepsie, NY, offers gap auto insurance for a one time payment
of $105 which can be spread out over the length of the loan.
A stand alone gap insurance policy from a credit union could be a good option if your current auto insurance
company doesn't offer gap insurance.
Insurance Regulators by State
If you want more information on how your state regulates gap insurance, or have any type of insurance related
issues you can find a direct link to your state's insurance regulator here.
Gap insurance is not available in all states. The following states: CT, LA, VA, WA have not allowed the sale of
gap insurance in the past.
Prior to 2010 there were insurance brokers who offered gap insurance online as a stand alone product. This is
no longer the case.
If you're looking for just gap insurance your best bet is probably a credit union (see below).
By far, the most expensive place to purchase gap auto insurance is from a dealership. Despite the cost, this is
where most consumers buy their gap insurance simply because they're not aware that other options are
available.
gap insurance in the past.
Prior to 2010 there were insurance brokers who offered gap insurance online as a stand alone product. This is
no longer the case.
If you're looking for just gap insurance your best bet is probably a credit union (see below).
By far, the most expensive place to purchase gap auto insurance is from a dealership. Despite the cost, this is
where most consumers buy their gap insurance simply because they're not aware that other options are
available.
| GAP Auto Insurance Coverage |
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