Gap Insurance: Does It Matter? (2023)

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Guaranteed asset protection, also known as gap insurance, covers the difference between your insurance payout after a total loss and the amount you are owed. still owe on your loan. Most drivers who have a car loan pick up a Progressive gap insurance plan to cover their costs.

Although there is no such thing as Progressive gap insurance, policyholders have a similar option to protect their new or leased vehicles. This is because Progressive offers loan / lease payments, which are similar but limit payments to 25% of the value of the vehicle. Since there are other options on the market, we look at the best car insurance service to determine where to find the best carrier for your vehicle.

How Does Gap Insurance Work?

They are sought after Proceed The insurance gap can be known to go by another name: loan/lease payment. This is because the company has a different policy than the standard gap insurance offered by other companies.

Gap Insurance vs. Loan/Lease Pay Share

Loan/lease pay is similar to gap insurance except that the amount of money you get is limited to 25% of the value of the car. In other words, you will receive a small percentage of the original value of your car with the loan/lease payment, although it will be much more than the cash value (ACV) of the car if after an accident.

Gap insurance is usually purchased near the beginning of your ownership period. On the other hand, loan/lease payments can be purchased in several installments over the life of the vehicle. Used cars are also difficult to qualify for for many gap insurance companies, which is one of the reasons drivers may turn to Progressive gap insurance.

Do You Need Travel Gap Insurance?

Whether you need Progressive or not insurance gap because your car depends on many things. It’s usually a smart choice for new or leased cars, however, and policies are affordable. Below, we will outline a few situations where gap insurance may be the right choice.

  • You have a rental car: Most lenders require buyers to have coverage for vehicles that have been leased. Gap insurance is usually an add-on to your general or accident insurance, although not always combined policies.
  • Your car is financed for a long time: If you’ve been taking money out of your car for a long time, you may need to buy gap insurance. The length of the loan means you end up owing more to the financing company than the car’s ACV.
  • Your car will crash soon: Some car models depreciate faster than others. Do your research on the specific car model you are getting to make sure you are well protected against the lower prices.
  • Your payment is low: For customers who buy their car with less than 20%, it is appropriate to buy insurance. Such low payments often result in poor equity on the vehicle as soon as it is driven off the lot.

Although Progressive gap insurance comes in the form of a loan/lease payment, you will get the same benefits. Those who need gap coverage can usually find coverage using the Progressive option.

How much does Progressive Gap Insurance cost?

Gap insurance is usually cheap, although the exact price will depend on factors such as your car’s age and model. Expect to spend an average of $20 a year to add Progressive gap insurance to your existing insurance.

As with most plans, it’s best to combine your Progressive gap insurance with homeowner’s insurance, renter’s insurance and life insurance. That way, you can get it cheap car insurance with low prices on your selected items.

Is Gap Insurance Cheaper From an Insurer or a Dealer?

Motorists can also buy gap insurance from the dealer where they bought their car. It is almost always cheaper to get gap insurance directly from a car insurance company, however, even if the dealer puts the policy together. insuring and paying for your car.

Buying gap insurance from a dealer can complicate matters if you plan to cancel the insurance at some point. Most major car insurance companies are more flexible in allowing you to cancel your car. Keeping this in mind, we recommend picking up Progressive gap insurance on a policy from a car dealer.

Our Car Insurance Recommendations

Progressive gap insurance can work for some drivers, but others may have better options. Be sure to also consider State Farm auto insurance as an alternative to Progressive gap insurance.

Whether you’re looking at Progressive car insurance or considering a comprehensive policy, it’s wise to compare. many car insurance rates. That way, you will be able to find the cheapest car insurance that suits your needs.

State Farms: Best Overall

Those who receive a loan from State Farm themselves have access to the company’s free Payoff Protector? service. This program, modeled after gap insurance, will cancel the difference between your car’s ACV and your car loan balance. Remember that your car must be insured by State Farm and your loan must be from a qualifying company.

State Farm has a strong reputation in the industry for its many local agents and competitive prices. The company is especially encouraging for young drivers because of the many discount opportunities for this high-risk group.

Advance: Best for Serious Drivers

Advance gap insurance, as mentioned above, is called a loan/lease payment and costs about $20 a year. Because the insurance is so good, it is a strong choice for those who want to protect their investment in a leased, used or new car.

The advance is known to ensure high-risk drivers who will be rejected elsewhere for poor grades, bad driving record and speeding tickets. Remember that the loan/lease payment pays 25% or less of the original cost of your car, while the gap insurance pays the drivers back.

Frequently Asked Questions (FAQs)

Does gap insurance cover a broken engine?

No, gap insurance does not cover engine failure. You only pay the difference that you owe on your car after an auto accident that leads to a total loss. Gap insurance is an optional insurance policy, so it will not cover the fault in all auto insurance policies.

What is the maximum amount that gap insurance can pay?

In general, gap insurance covers the entire difference between the original value of your car and the remaining loan amount. You may have to pay a deductible before this part of your auto insurance, however. Payday loan/lease, which is what you get through Progressive gap insurance, has a payment limit of 25% of the original cost of your car.

Is gap insurance valid after two years?

After two years, gap insurance is suitable if you are under water on your car loan. Those who have closed the gap between the value of their car and the amount owed will likely not need gap insurance since they have taken out more loans.


The Detroit Bureau collects data from all the major auto insurance companies to compile a list of the best insurers. Our in-depth ranking system is based on market share, coverage, auto insurance quotes produced by Quadrant Information Services, customer satisfaction and ratings from industry experts. . Each insurer is given a weighted score in four areas, as well as an overall score out of 10.0.

We recommend car insurance companies based on these rankings, but we encourage you to do your own research and compare quotes to find the best one.

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