No. Elephant Insurance does not have gap insurance. Elephant offers loan/lease payoff insurance instead. Elephant’s loan/lease payoff coverage works pretty much the same way as gap insurance, covering the difference between what your car is worth at the time of a total loss and what is owed on the loan or lease. Specifically, Elephant loan/lease payoff insurance covers the remaining loan or lease balance after your comprehensive or collision insurance has paid the actual cash value (ACV) of your vehicle, and after you have paid your deductible.
The ACV of your car is the vehicle’s depreciated value, which might be less than what you owe on your lease or loan. Typically, loan/lease payoff coverage only pays a percentage of this “negative equity,” but this is not the case with Elephant.
The main difference between traditional gap insurance and Elephant’s loan/lease payoff coverage is that gap insurance typically must be purchased within 30 days of buying a new (or new-to-you) vehicle. Loan/lease payoff coverage from Elephant Insurance can be added to your policy at any time, but there may be some limits on how old your car can be to qualify.
Gap insurance pays for the difference between the actual cash value of a totaled car and the remaining balance on the policyholder’s loan or lease. Gap insurance is important because new cars depreciate rapidly, which means that a driver may owe more on their loan or lease than what their car is worth. Without gap insurance, you’ll be personally responsible for any remaining balance on your loan or lease, even though you can’t drive the car anymore.… read full answer
Alternatives to Gap Insurance
Not all insurance companies offer gap insurance, but some offer loan/lease payoff insurance as an alternative. Loan/lease coverage is similar to gap insurance, except that it usually only pays up to 25% of the vehicle’s actual cash value toward the policyholder’s loan or lease balance, which might not be enough to cover the full amount owed. If you’re curious about gap insurance or loan/lease coverage, you should check with your insurance company to see if they offer either.
It’s important to note that gap insurance only pays when your car is totaled, so you cannot file a gap claim if you simply can’t make your loan or lease payments. Additionally, most gap insurance policies will not pay your collision or comprehensive deductible, if applicable.
GAP insurance pays the difference between what your car is worth on the market (as it depreciates) and the amount still owed under the lease contract, or loan if you are financing a purchase. Before you purchase GAP insurance for a leased vehicle, read the contract carefully to see if GAP coverage is already included in the cost of the lease. It may not be phrased as "GAP" in the contract, it may be referred to as "lease coverage." … read full answer
Compare the price of a GAP policy purchased from your personal insurance company with that offered by the dealer. You may find your insurance company offers coverage at a much lower cost.
Also, as you make lease payments over time, the gap between the lease value and actual value will gradually narrow. You may be able to drop the GAP policy after a few months, depending upon what kind of lease deal you negotiated.
Yes, Progressive offers gap insurance for about $5 per month, on average. If your car is totaled, Progressive's gap insurance, also called loan/lease payoff coverage, covers the difference between your loan balance and what your car is worth, minus your deductible. Progressive gap insurance will pay as much as 25% more than your car’s depreciated value.… read full answer
Let’s say you finance $30,000 for a new car, which is now worth $20,000. You total your car and find that you still owe $25,000 on the loan. Full coverage only pays up to your car’s depreciated value—$20,000. That leaves you with a $5,000 difference. If you carry gap insurance, Progressive will pay the complete $25,000 balance, minus your deductible (usually $500 or $1,000).
You might consider Progressive gap insurance if there is a significant difference between your car’s actual cash value and what you owe on a loan used to get it. In particular, if you just bought a new car (especially with a low down payment) or are financing a vehicle for more than 48 months, you might want gap insurance. You must carry comprehensive and collision coverage to add gap insurance to a Progressive policy.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by WalletHub.
Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.