The best gap insurance is offered by Progressive, Allstate, and Liberty Mutual. It’s best for drivers to buy gap insurance directly from their standard insurance provider, or as a standalone policy from another insurance company if their insurer does not offer gap coverage.
Drivers should usually avoid buying gap insurance from a dealership or bank, so they do not end up paying interest on their premium. And like with any insurance product, it’s best to compare multiple quotes.
Best Gap Insurance Companies
Tips for Getting the Best Gap Insurance
Comparing options to find a low price is always important, but price should only be one factor that you consider when deciding on the best gap insurance. You should also compare coverage limits.
For instance, Progressive and American Family offer variations of gap insurance called “loan/lease payoff” and “loan or lease assistance coverage” respectively. Both insurers limit gap payouts to 25% of the car’s actual cash value (ACV). For most drivers, 25% will be plenty to cover any gap between their loan balance and the ACV. But it’s worth checking that 25% will be enough for you if you’re shopping for gap insurance. You can use online tools like Edmunds or Kelley Blue Book to estimate your car’s future value and compare it with your loan balance.
In addition, consider whether you want gap insurance to cover your deductible. Most policies will not pick up the tab for your collision or comprehensive deductible if your car is destroyed or stolen, but Allstate is a notable exception.
To prevent future inconvenience, you should also check policy details and read reviews before purchasing gap insurance to determine if a company allows customers to easily cancel their coverage. Gap insurance is useless once your loan balance is less than the car’s value, so many drivers cancel their gap payments after a few years.
Finally, remember that dealerships and banks rarely offer the best gap insurance. One exception to this is if the bank or dealer includes interest-free gap insurance as part of your policy. For instance, car loans made with State Farm Bank automatically include “Payoff Protector,” which functions the same way as gap insurance.
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