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Does Geico Offer Gap Insurance?

No, Geico does not offer gap insurance coverage.  However, there are a number of auto insurance companies that do offer this type of coverage.  Before trying to decide on whether to go with Geico or another auto insurance company that offers gap insurance, you must first understand what gap insurance is and when you need it.

What Is Gap Insurance?

Gap insurance is a type of insurance that pays the ‘gap’ between the value of the vehicle and the amount you owe on the vehicle, if the amount that you owe is higher than the value of the vehicle. Gap insurance is not required.

How Much Does Gap Insurance Typically Cost?

Because gap insurance can keep you from paying a hefty out of pocket expense should you need it, you may be surprised to find out that it is very affordable.  In fact, gap insurance typically costs between 5% and 6% of your annual comprehensive and collision payment. This means that if you are paying $600 a year for comprehensive and collision coverage, adding gap insurance would add between $30 and $36 to your annual premium.  Not bad for a type of insurance that can keep you from being stuck paying off a few thousand dollars on an auto loan for a car you no longer have.

When Do You Need Gap Insurance?

If you are financing or leasing a car, there is a good chance that you may be required to carry Gap insurance by your lender or the car dealer.  Otherwise, you may elect to have Gap insurance to cover the cost of depreciation on your vehicle.

Which Auto Insurance Companies Offer Gap Insurance?

Although Geico doesn’t offer gap insurance, there are a number of auto insurance companies that do offer Gap insurance.

  • AllState offers gap insurance through their auto insurance policies.  The company also offers this type of coverage through some authorized car dealers.  Esurance offers gap insurance, also called loan/ lease insurance coverage, that pays up to 25% of the Actual Cash Value of a totaled car. 
  • Nationwide offers gap insurance as optional add-on coverage to cover the difference between the amount you owe on your auto loan and the actual cash value of the vehicle.
  • Farmers Insurance offers both gap Insurance and a New Car Pledge Program that will replace a totaled car without factoring in depreciation.
  • Progressive boasts that its gap insurance only adds about $5 a month to your premium and covers the difference between the value of your car and the amount you owe on your loan.
  • State Farm, AAA, and USAA and some other insurance companies offer gap insurance on vehicles which have been financed through their financing companies.
  • Travelers Insurance, American Family, and one of Geico’s main competitors, Esurance, also offer gap insurance.

>>MORE: Gap Insurance Companies

What if You Have Geico Auto Insurance and You Want Gap Insurance?

You may already have Geico auto insurance coverage when you purchase a new car and you are satisfied with your coverage.  If you need to have gap insurance and keep Geico, you can purchase gap insurance through the auto dealership. It is important for you to know, however, that gap insurance purchased through a dealership is often more expensive than that which is purchased through your auto insurance company.  Furthermore, you may be required to pay off the full price of the gap insurance coverage upfront.

You can also switch your car insurance to another company that offers gap insurance. You can choose any company from the list above. Remember it is always a good idea to compare several insurance quotes of different companies to find the best deal for you.

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Final Thoughts

Gap insurance is a rather inexpensive type of insurance that can save you a tremendous amount of out-of-pocket expenses if you buy or lease a new car and it is totaled. Unfortunately, Geico does not offer this type of insurance to its customers.  However, if you already have Geico insurance and want to keep it, you may want to consider purchasing Gap insurance through your car dealer if you purchase a new car. If you do not want to consider this option, there are a number of large reputable auto insurance companies besides Geico that do offer Gap insurance including its main competitors Esurance and Progressive.

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