Gap insurance is important for Pennsylvania drivers who have a car loan or lease. Pennsylvania gap insurance provides drivers with more financial protection in the event of theft or total loss than comprehensive and collision coverage. Many of the top car insurance companies offer gaps insurance.
What is gap insurance?
General Asset protection (or “Gap”) insurance covers the difference between the amount you owe and the car’s actual value (ACV), in the event that the car is stolen or destroyed. Your car can depreciate quicker than you can pay the loan down. Without gap coverage, you could be out thousands of dollars after a serious accident.
What is gap insurance in Pennsylvania?
How does Pennsylvania gap insurance work? A few things to keep in mind. It is only available to cars up to one year old. You might not be eligible for gap insurance in Pennsylvania if your car is older than you are.
Gap coverage is not the exact same as new car replacement insurance. This type of insurance allows you to purchase a new car with the same model and price as the one you lost. Gap insurance does not cover a replacement vehicle. It only covers the amount that you owe on your car loan.
What are the best times to use gap insurance?
Gap insurance is only available if your vehicle is declared totaled in an accident or stolen. You would then apply for gap insurance if you file a claim.
Let’s say, for example, that your 2020 Honda Civic is damaged in an accident. Although the car’s cash value is $20K and you paid a small downpayment when it was purchased, it still owes $24K. Interest has also been added. Your insurer will pay $20K or up to your policy limits if you have regular collision insurance. Gap insurance would pay the lender the extra amount to repay the loan.
Gap insurance vs. other coverages
Gap insurance is a good option for drivers who want financial protection. However, it’s important to understand when it is most beneficial. Consider gap insurance in relation to the various types of car insurance coverages included in standard policies. While gap insurance can be similar to other types of coverage there are a few key differences.
Pennsylvania: Where can I buy gap insurance?
If you have financed your vehicle through a dealership, it is worth looking into Pennsylvania gap insurance. Although it may not be the cheapest option, they might be able write you a gap policy.
Gap insurance companies can also write policies, but you may want to go directly to your primary auto insurance company. Although this may be the most cost-effective option for you, it is worth getting quotes to make sure.
Pennsylvania Gap insurance companies
Finding a Pennsylvania company offering gap insurance is the first step. These insurers, as well as others, offer gap insurance for new vehicles that are involved in an accident or theft.
- Plymouth Rock Assurance is a regional insurer that sells policies only in six states including Pennsylvania. It also offers gap insurance and auto insurance.
- Yoder Insurance Yoder is a regional insurance company that only sells policies in Pennsylvania. It is a smaller insurance company, but it does offer gap insurance.
- Nationwide is a national insurer that insures cars, homes, and other assets. This provider also offers Gap insurance as an option.
- State Farm – State Farm is the largest American auto insurer. Its version of gap insurance, Payoff Protector, sells more than any other company. Anybody who is eligible for a car loan from State Farm (an alliance with US Bank), may buy this even if they have car insurance with another company.
- USAA – If you or someone in your immediate family are serving in the military, or are veterans, you may be eligible to purchase insurance from USAA. Total Loss Protection is a product offered by the company for cars less than 7 years old that have had a car loan of more than $5.000. It reimburses you up to $1,000.
Questions frequently asked
What is the cost of gap insurance?
The type of car you purchase and other factors will affect the cost of gap insurance. It may cost you between $50 and $100 a year if it is part of your car insurance policy. In most cases, gap insurance purchased at a dealership will cost more.
Pennsylvania law requires gap insurance
You are not legally required to purchase gap insurance in Pennsylvania. Although the state has laws regarding the type of and amount you need car insurance, gap insurance is not required and only for those with a newer vehicle.
What is standalone gap insurance?
You can buy gap insurance in Pennsylvania in two ways: as part of your car insurance policy or as a standalone policy. Gap insurance providers may offer standalone policies, such as dealers or independent finance companies.
How can you cancel your gap insurance?
You will need to notify your dealer, finance company, or car insurance company if you want to cancel your gap insurance. You may want to wait until the loan is paid off in full before cancelling your gap insurance.
