Is Gap insurance for leased car necessary? This question is about Car Insurance

Is Gap insurance for leased car necessary?

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This question is about Car Insurance

Mark Dennis, Resident Financial Planner

@MarkDennis • 01/25/16 This answer was first published on 01/25/16. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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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."

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.

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How does gap insurance work in Florida?

Gap insurance in Florida works the same way as gap insurance in the rest of the U.S. It pays the balance remaining on a car loan or lease contract after a liability, comprehensive, or collision policy pays out the actual cash value of a totaled vehicle. The state of Florida doesn’t require any driver to carry gap insurance. However, certain lenders in Florida may require customers to carry … read full answer gap insurance – short for guaranteed asset (or auto) protection insurance – if they get a car loan or lease.

Best Gap Insurance Companies in Florida

Esurance

PURE Insurance Company

Nationwide

The Hartford

Progressive

Dozens of companies, including banks and dealerships, offer gap insurance in Florida. While you should take your time deciding which one is right for you, you can also have confidence in the fact that gap insurance works the same way in Florida as in the rest of the country.

It’s worth noting that gap coverage is usually cheaper to purchase from an insurance company than a dealership. For more information, check out WalletHub’s complete guide to gap insurance.

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