Does Nationwide offer gap insurance?

Gap insurance works by covering the difference between the balance on a car loan or lease and what the vehicle is actually worth if it is stolen or declared a total loss. For example, if you owe $24,000 on your loan and your car is worth only $20,000 when it's totaled, gap insurance would cover the $4,000 gap. Purchasing gap coverage ensures that you don't have to make loan or lease payments for a car that is no longer drivable. This type of insurance is optional, unless required by your lender or lessor.… read full answer

In order to purchase gap coverage, a driver typically needs comprehensive and collision insurance, as well. Collision and comprehensive coverage will pay up to the car’s actual cash value (ACV) if it’s a total loss, and then gap insurance pays off whatever you still owe.

Example of How Gap Insurance Works

Imagine you buy a $50,000 car with a down payment of $10,000. One year later, the car is worth $20,000, but you still owe $24,000 on the loan. If the car is totaled in an accident or stolen, your insurance company will pay $20,000 (the car’s actual cash value), minus your deductible.

If you don’t have gap insurance, you’ll still owe $4,000, and you’ll still have to pay off the car even though you can’t drive it. But if you do have gap insurance, it will pay the $4,000, as you can see below.

Other Key Things to Know About Gap Insurance

• Gap insurance can be purchased from dealerships, banks, credit unions and car insurance companies.

• The money received from your gap insurance policy will be paid directly to your lender or lessor, not to you or toward a new vehicle.

• Some gap insurance policies will cover your comprehensive or collision deductible.

• Gap insurance is not legally mandated in any state, but it can be required by lenders and lessors.

• If you sell your car, pay off your loan early, or trade your car in, you can receive a gap insurance refund.

To learn more, check out WalletHub’s guide on gap insurance.

Yes, Progressive offers a type of gap insurance called loan/lease payoff coverage. Loan/lease payoff insurance helps cover the difference between a totaled car’s actual cash value and the policyholder’s loan or lease balance, but will only pay up to a maximum of 25% of your vehicle’s value toward this difference.

Key Things to Know About Progressive Loan/Lease Coverage

• Progressive loan/lease payoff coverage costs $5 per month.
• Progressive loan/lease coverage does not pay for your deductible, extended warranties, or any balance that you rolled over from previous loans.
• Loan/lease coverage is usually a better investment than purchasing gap insurance from a dealership, where the cost is often rolled into your loan and charged interest.
• Fault is not a factor in loan/lease coverage payouts.

For more information, check out WalletHub’s complete guide to gap insurance.

No, Geico does not offer gap insurance, but you can find affordable gap policies from many other major insurance companies. Gap insurance is a specialty type of coverage that pays the difference between your car’s actual cash value and your loan or lease balance if the vehicle is stolen or totaled. You may be required to carry gap coverage if your vehicle is financed.… read full answer

Popular Gap Insurance Providers

• Allstate
• Travelers
• The Hartford
• Liberty Mutual
• Nationwide
• Kemper
• Progressive
• Esurance

If you’re a current Geico customer and want to maintain your policy, you could purchase gap insurance from a dealership or a stand-alone company. However, dealership gap insurance is often the most expensive option, since it’s usually rolled into your loan and charged interest.

For more information, check out WalletHub’s complete guide to gap insurance.