Does Allstate Have Gap Insurance?
Allstate sells gap insurance—and it’s one of the few major companies that offer it. Learn how to protect your assets here.
Written by Bonnie Stinson
Reviewed by Kathleen Flear
Allstate gap insurance is available to drivers with financed or leased vehicles with comprehensive/collision coverage. If your new car is declared a total loss—and you still owe money—Allstate’s policy can kick in to pay for the loan balance.
Buying a new car is a major purchase, and getting a
car insurance
policy that protects your new asset is essential. We’re explaining everything you need to know about Allstate gap insurance. This coverage usually costs less than $40 dollars per year and it might come in really handy.Here’s what you need to know about how gap insurance works, how much it costs, where to buy it cheaply, and who should buy gap insurance.
Does Allstate offer gap insurance?
Yes, Allstate offers gap insurance.
Gap insurance
stands for Guaranteed Asset Protection. It’s a policy add-on that helps protect your assets if your financed or leased vehicle is damaged or stolen while you are upside down on the car loan.
In this situation, you could end up owing money on a vehicle that doesn’t exist anymore. With this policy, Allstate will help pay for the difference, so you don’t go broke paying for a non-existent car.The amount of any comprehensive or collision claim payout depends on your car’s
actual cash value (ACV)
—replacement cost of your vehicle minus depreciation. Mileage, age, condition, and prior accidents are all factors that contribute to your vehicle's deprecation. The payout does not depend on how much money still owed on your loan or lease, and drivers commonly find themselves hundreds, even thousands of dollars short of what they need to close out their bank lease or loan.
Folks with longer loan terms, small down payments, and high interest rates stand to benefit the most from gap insurance.
How does gap insurance work with Allstate?
Gap insurance is purchased as a complement to full coverage car insurance (aka
collision
plus comprehensive
coverage). That’s because gap coverage pays for the difference between your full coverage payout and your remaining loan balance.You can buy gap insurance from Allstate if you are the original loan-holder and owner of the vehicle. If your vehicle is totaled or stolen, you can file a claim to help pay off the loan.
Here’s an example of how gap insurance works:
- You purchase gap insurance as an add-on for your new financed car from Allstate
- A year later, your car is stolen or declared a total loss
- You file a claim with Allstate
- A claims adjuster determines the ACV of your car
- Allstate pays your lender the remaining loan balance, less your deductible, and you receive a check for anything leftover
Some insurance companies will only allow you to purchase gap coverage if your car is less than three years old. Ask your Allstate agent if you’re eligible, or get
car insurance quotes online
to find a provider that offers gap insurance for your vehicle.Compare insurance quotes from 50+ insurance companies with Jerry in under 45 seconds
Compare insurance quotes from 50+ insurance companies with Jerry in under 45 seconds
4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversGap insurance vs. loan/lease payoff coverage
Loan/lease payoff coverage is similar to gap insurance. It helps pay for your loan or lease if your vehicle is a total loss.
However, loan/lease payoff usually covers less than the total value of your car. There may be other eligibility requirements more often then not, insurance providers only offer one option. For example, State Farm only offers loan/lease payoff coverage if you financed your vehicle through State Farm.
Ask your insurance agent which option they recommend, and think carefully about whether you have enough protection for your assets.
Is it better to buy gap insurance from the dealership or your insurance company?
You can buy gap insurance from a dealership, from your lender, or from your car insurance company.
In-house financing with car dealers
offers the most straightforward option—but beware. If you buy this coverage from a dealership, it’s more expensive. While gap coverage is usually automatically wrapped into your loan agreement, this means that the lump sum for gap coverage is added to your total car loan. So you’ll pay interest on the car’s price tag and your gap coverage.On the other hand, Allstate can sell you gap coverage for between $20 and $40 per year—and that’s a flat rate, cancelable at any time. For a few dollars per month with no interest charges, that’s a much better deal.
Is gap insurance worth it?
From a cost-benefit perspective, gap insurance is almost always worth it. It only costs a few dollars per month, yet it gives you thousands of dollars’ worth of coverage.
If you drive a new financed or leased vehicle—and put down a low or no downpayment—consider how precarious your financial situation could be. Totaling your car is certainly inconvenient, but it could wreck your finances if you still owe your lender the full payment on a car that’s no longer driveable.
Lenders can require you to carry gap insurance on a leased vehicle, but otherwise, it’s not required by law. Compare your bank account balance to your remaining loan balance to decide whether or not gap insurance is worth it.
How to find the best gap insurance
You might be surprised to find that some major car insurance companies do not offer gap coverage. While Allstate, USAA, and Progressive offer gap insurance or a related policy, State Farm and GEICO do not.
If this is a deal-breaker for you, make sure you compare quotes from multiple providers before you sign up for a policy. Find
cheap car insurance
(including gap coverage!) by shopping around ahead of time. RECOMMENDED
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