Does GEICO Have Gap Insurance?
GEICO doesn’t offer gap insurance, but you can purchase it from a standalone company, lender, or dealership.
Written by Kaitlin May
Reviewed by Hillary Kobayashi
GEICO is renowned for its affordable coverage, but it doesn’t offer gap insurance to its customers. To protect your leased or owned vehicle, you’ll need to source gap insurance from a dealership, standalone company, lender, or new provider.
With a standard
car insurance
policy from GEICO, you’ll get access to certain benefits—but you won’t be able to purchase gap insurance. Want to know more about your options in case you are involved in an accident? In this article, we’ll fill in all the gaps about what gap insurance is, whether or not you need it, and how to purchase it.Does GEICO offer gap insurance?
No, GEICO does not offer gap insurance.
What exactly is gap insurance? If your loaned vehicle is totaled or stolen, Guaranteed Asset Protection, or
gap insurance
, will cover the difference between the amount you still owe on your loan and what your vehicle is actually worth.This coverage should not be confused with
new car replacement insurance
, which allows you to purchase a similar model to your recently-bought vehicle if it’s totaled.While most customers can buy gap insurance from their providers, State Farm, GEICO, and USAA customers aren’t so lucky. Although gap insurance won’t swoop in and replace your car, it will guarantee you don’t default on your loan for your totaled or stolen car.
How does gap insurance work with GEICO?
Since GEICO doesn’t offer gap insurance or new car replacement insurance, you’ll have to rely on alternative coverage, like
collision
or comprehensive insurance
, if your vehicle is totaled or stolen.Collision and comprehensive insurance—or full-coverage insurance—through GEICO will reimburse the
actual cash value
of your vehicle if it’s considered a total loss. Depending on your policy, you might have to subtract your deductible
and additional fees. The same coverage will kick in if your car is stolen.What’s missing, then? Full-coverage insurance won’t cover the remaining loan balance on your recent purchase if your vehicle is totaled or stolen. In most cases, that amount is typically more than the actual value of your vehicle at the time of the incident, and you’ll need to pay off the
remaining loan balance
.You’ll run into issues if you only have
liability insurance
since it only covers other drivers’ expenses—not yours.RECOMMENDED
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What to do if you have GEICO and need gap insurance
Although gap insurance is typically an optional type of coverage, it might be a requirement if you’re
leasing a car
. If that's your situation, don’t worry—you still have options if you have GEICO insurance and find out you need gap coverage
.From dealerships to
credit unions
, there are other sources you can lean on for gap insurance when you take out an auto loan. You can even purchase it through a bank if that’s most convenient. If you’re purchasing gap insurance through your lender, you can branch out to another insurance provider while maintaining your GEICO coverage.That said, we don’t blame you if you want to bundle your coverage in one place. Your best bet is to compare
car insurance quotes
from companies that offer gap insurance to your current premium. To name a few, Progressive
, Allstate
, and Nationwide
have gap insurance available to customers. If their rates look a little more wallet-friendly, you might want to jump ship to one of these providers altogether.Is gap insurance worth it?
Most likely. Not only is gap insurance a cost-effective coverage under most providers at $20 to $40 per year in addition to your premium, but it could also spare you astronomical costs depending on your vehicle’s value when it’s considered a total loss.
In the first year of financing a car, you’re more vulnerable to the effects of
depreciation
. Any type of insurance you have, including collision coverage, won’t reimburse you for more than your car’s value—which will be much less than the hefty bill you’ll need to handle to cover the remainder of your loan.Gap insurance takes care of the balance at an affordable rate, which makes it worth the investment. It’s also possible to cancel it when you’ve paid down your loan—and you can even
get a refund
for your payments.MORE: The best car insurance for bad credit drivers
What is the most gap insurance will pay?
The amount gap insurance will pay out depends on different variables, like your credit score, down payment amount, and vehicle type. Each loan term and the amount will be slightly different, and those factors contribute most to your gap coverage.
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