Best Gap Insurance Coverage in 2025 (Top 10 Companies Here!)

The best gap insurance coverage companies are Erie, Nationwide, and Auto-Owners, with monthly prices starting as low as $13. Gap insurance helps pay the difference between your car’s actual value and what you still owe on your loan if the vehicle is totaled or stolen.

Our Top 8 Company Picks: Best Gap Insurance Coverage

Erie is great for newer cars, covering the full loan amount on vehicles up to three years old. Nationwide offers up to 120% loan-to-value coverage plus Gap Plus perks like deductible assistance and roadside support.

Auto-Owners provides full balance coverage on cars up to two years old, with personalized service and local agent support. Browse our relevant guide titled “Compare Online Car Insurance Quotes to Save Money.”

Check their features to get dependable gap insurance. Enter your ZIP code to start comparing premiums from highly-rated insurers in your area.

How Gap Insurance Works

Gap insurance, short for guaranteed asset protection, is optional coverage that pays the difference between your car’s actual cash value and the remaining loan or lease balance if your vehicle is totaled or stolen. Get full details in our guide on how to collect car insurance after your car is stolen.

Compare Gap Insurance Rates

Monthly gap insurance rates are generally affordable, ranging from $12 to $16 across major providers. While the cost is relatively low, the value it provides can be significant, potentially saving you thousands if your vehicle is totaled and your loan balance exceeds the payout from your standard insurance.

Gap Insurance Cost by Provider

Ultimately, the best value depends on your loan situation, vehicle depreciation rate, and whether you’re bundling gap insurance with other policies. Comparing quotes from multiple companies is the easiest way to make sure you’re not overpaying for this essential protection (Read more: Why Auto Insurance Rates Go Up).

This helps you avoid paying out of pocket for a car you no longer have, especially during the early years of a loan or lease when depreciation outpaces repayment.

Gap insurance is typically added to your auto policy or purchased separately. While not legally required, it’s highly recommended if you made a small down payment, have a long-term loan, or rolled negative equity from a prior vehicle into a new loan.

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When to Consider Gap Insurance

Gap insurance isn’t necessary for every driver, but certain situations create a higher risk of owing more on your loan than your vehicle is worth. If you fall into one of the following categories, gap coverage can offer financial protection and peace of mind during the early years of your loan or lease.

Below are key scenarios where gap insurance makes the most sense. Each one highlights a situation where your loan could outpace your car’s value, leaving you vulnerable to financial loss in the event of a total loss or theft (Learn More: Do I need multiple policies to get enough coverage?)

You’re Financing With Little or No Down Payment

When you finance a car with little money down, it can lose value faster than your loan balance from the moment you drive off the lot, leaving you owing more than the car is worth within days of purchase.

If your loan amount is higher than your car’s value, like when you buy new with no down payment, gap insurance helps cover the difference if your car is totaled.

In the event of a total loss, your insurer will only pay the car’s actual cash value, not what you still owe on your loan. Gap insurance bridges that difference, helping you avoid out-of-pocket costs for a car you no longer have (Learn More: If my car is declared a total loss, can I still drive it?).

You Rolled Over Debt From a Previous Loan

If you traded in a vehicle with an existing loan balance, the unpaid amount is likely rolled into your new loan. This adds to your overall debt and creates a situation where your car is worth less than what you owe from the beginning.

Without gap insurance, a total loss could leave you paying off the balance from your old car on top of losing your new one. Gap coverage helps protect you from having to carry that leftover debt alone. Learn more in our guide, “How do policy loans from the cash value work?”

You’re a High-Mileage Driver

Drivers who put a lot of miles on their cars each year accelerate depreciation much faster than average.

This creates a growing gap between your vehicle’s market value and the loan balance. If your car is totaled while you still owe more than it’s worth, gap insurance can save you from paying that difference out of pocket.

Read more: Actual Cash Value (ACV) of Vehicles

You Have a Long-Term Car Loan

Long-term car loans, typically more than 60 months, extend the time it takes for your loan balance to catch up with your car’s value. These loans often come with lower monthly payments, but they increase the chance of being upside down for a longer period.

If your vehicle is declared a total loss early in a long-term loan, you could face a significant financial shortfall. Gap insurance helps fill in that gap so you’re not stuck paying off a loan for a car you no longer own. Check out our guide about getting a car accident vehicle damage estimate.

Case Studies: How Gap Insurance Provides Financial Security

Gap insurance coverage offers essential protection for vehicle owners facing unexpected financial shortfalls. Whether you’re a first-time car buyer, a leased vehicle owner, or a ride-share driver, gap insurance ensures peace of mind when dealing with loan or lease payoffs after a total loss.

• Case Study #1: Samantha financed a new SUV and totaled it two months later. Her insurer paid $19,000, but she owed $23,800. Erie covered the $4,800 gap, preventing added debt.
  
• Case Study #2: David’s leased sedan was stolen with $26,000 left on the lease. Insurance paid $21,000. Nationwide covered the $5,000 difference and part of his deductible through Gap Plus.
  
• Case Study #3: Maria’s two-year-old crossover was totaled in a flood. She owed $20,300 but received only $16,500. Auto-Owners paid the $3,800 shortfall, helping her avoid financial strain.

These case studies show how Erie, Nationwide, and Auto-Owners offer customized gap insurance for different needs. Learn more in our guide, “Does State Auto Insurance Company offer gap insurance?”

8 Best Insurance Companies for Gap Coverage

Erie, Nationwide, and Auto-Owners are top picks for gap insurance, especially if you’re paying off a car loan or lease.

Each company offers something a little different. Take a look at the pros and cons below to help you decide which one is right for you.

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#1 – Erie: Top Overall Pick

Pros

• Affordable Pricing: Gap insurance starts at $14/month, offering excellent value for full loan balance coverage.
• Strong Claims Performance: Erie processes gap insurance claims quickly, helping you close loan balance gaps fast.
• Full Balance Coverage: Pays the entire remaining loan or lease balance on cars up to 3 years old.

Cons

• Limited States: Erie’s gap insurance is only available in select states—availability may vary by location. Check our guide, “Does Erie Insurance offer gap insurance?“
• No Digital Management: Erie lacks online tools to quote, adjust, or manage your gap insurance.

#2 – Nationwide: Best for Reliable Coverage

Pros

• Competitive Pricing: Gap coverage starts at $13/month, with protection up to 120% of the vehicle’s value.
• Enhanced Gap Plan: The Gap Plus option includes deductible and loan-related gap benefits.
• Reliable Claims Access: 24/7 support ensures prompt help when filing a gap insurance claim.

Cons

• Variable Cost:Gap insurance may be more expensive than regional competitors.
• Few Discounts: Limited bundling or loyalty savings compared to other providers. Check our guide, “How do I renew my car insurance policy with Nationwide?“

#3 – Auto-Owners: Best for Reliability Focused

Pros

• Covers Full Loan or Lease Balance: Auto-Owners offers gap insurance that pays off the entire remaining loan or lease, not just a capped percentage, which gives borrowers maximum protection.
• Available for Cars: Drivers with newer vehicles can access gap insurance within two years of the vehicle’s purchase, ideal for new but not brand-new cars (Read more: Auto-Owners Review).
• Competitive Pricing: Despite being a regional insurer, Auto-Owners offers gap coverage at just $13/month, matching national competitors like Nationwide.

Cons

• Limited Plan Customization: Unlike larger insurers, Auto-Owners offers fewer options to tailor the gap insurance terms, such as coverage duration or value limits.
• Regional Availability Only: Auto-Owners operates through a network of independent agents and is only available in 26 states, restricting access to many drivers across the U.S.

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#4 – Allstate: Best for Customer Service

Pros

• High Coverage Limit: Covers up to 125% of your vehicle’s value, ideal for larger auto loans.
• Replacement Features: Gap insurance includes new car replacement, beyond basic payout.
• Trusted Claims Support: Offers consistent financial backing to fulfill gap insurance claims.

Cons

• Higher Premiums: Allstate’s rates are higher than other gap insurance providers. See more details in our guide titled, “Does Allstate offer gap insurance?“
• Fewer Policy Discounts: Limited opportunities to lower gap insurance costs through bundling or promotions.

#5 – Farmers: Best for Great Add-ons

Pros

• Customized Pricing: Gap insurance starts at $15 a month, adjusted for car value and loan terms.
• Solid Claims Handling: Known for dependable resolution of gap insurance payouts.
• Coverage up to 115%: Offers gap protection for loans up to 115% of your car’s value.

Cons

• Above-Average Premiums: Gap insurance rates are higher than many competitors. Learn more in our guide, “Does Travelers offer gap insurance?“
• Basic Online Tools: Limited digital features to manage or update gap coverage online.

#6 – American Family: Best for Family Policies

Pros

• Lowest Cost Option: Offers gap insurance starting at just $12 per month.
• Gap Discounts Available: Multi-car and household policies can lead to gap coverage savings.
• Agent Support: Local agents provide in-person help for gap insurance questions and claims.

Cons

• Restricted Service Area: Gap insurance is available only in states where American Family operates.
• Slower Claims Process: Claims resolution may take longer in some cases. Find out more in our relevant guide titled, “What types of car insurance coverage does American Family Insurance offer?“

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#7 – Progressive: Best for Roadside Assistance

Pros

• Budget-Friendly Tool: “Name Your Price®” lets drivers select affordable gap insurance options.
• Strong Value Limit: Covers up to 125% of car value, which helps with negative equity.
• Low Starting Price: Monthly premiums begin at $14 for new vehicles up to 1 year old. Learn more in our guide “Does Progressive offer gap insurance?“

Cons

• Inconsistent Rates: Gap insurance pricing varies greatly by state and driver history.
  
• Customer Service: Some customers report delays in processing gap insurance claims.

#8 – Liberty Mutual: Best for Extra Benefits

Pros

• Extended Loan Coverage: Pays up to 120% of your vehicle’s value for better loan protection.
• Flexible Billing: Offers custom gap insurance payment schedules to fit different budgets.
• First-Accident Protection: Includes accident forgiveness within your gap coverage plan.

Cons

• Most Expensive Option: Starts at $16 a month, the highest premium in this ranking.
• Discount Restrictions: Gap insurance discounts vary by location and coverage type. Learn more in “Does Liberty Mutual offer gap insurance?“

Protect Your Financed Car With Gap Insurance

Gap insurance is essential if you’re leasing or financing a car, especially when making a small or no down payment. New cars lose value quickly, leaving a “gap” between what the car is worth and what you owe. If your car is stolen or totaled, gap insurance pays this difference, so you don’t have to.

Leasing a car makes gap insurance even more valuable. If your leased car is totaled or stolen, you could still owe lease payments. Allstate gap insurance covers this, preventing financial stress. Learn more in our guide, “Car Insurance for Leased or Financed Cars.”

Many drivers also search for real-world experiences by browsing gap insurance Reddit discussions, where users often share personal stories about when gap coverage saved them from thousands in out-of-pocket costs, or when they wished they had it.

Whether it’s covering loan gaps or protecting leased or work vehicles, these companies provide essential coverage when it matters most. Does another provider have lower rates? Find out by entering your ZIP code into our free quote comparison tool.

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