Does Liberty Mutual Have Gap Insurance?
Liberty Mutual sells gap insurance—and it could help you save thousands of dollars in the event your car is totaled or stolen. Learn more here.
Written by Melanie Johnson
Reviewed by Hillary Kobayashi
Liberty Mutual offers gap insurance to its customers. Purchasing gap insurance from Liberty Mutual ensures that if your vehicle is stolen or totaled and its actual cash value is less than the amount you still owe on your loan, they will cover the difference.
Gap insurance may seem a bit confusing—but it doesn’t have to be! We’ve created a handy guide to this type of
car insurance
coverage to help you better understand Liberty Mutual’s gap insurance policy. We’ll cover how gap insurance works, how much it costs, and if it’s worth it.Does Liberty Mutual offer gap insurance?
Yes, Liberty Mutual offers gap insurance.
Gap insurance
, also known as Guaranteed Asset Protection, protects you from paying the price of depreciation in the event of an accident. Gap insurance covers the difference, or “gap,” between the actual cash value (ACV)
of your vehicle and the amount still due on your loan or lease.Still with us? You probably already know that vehicles begin to lose their value as soon as they’re driven off the dealership lot—but the amount you owe on your loan or lease does not. If you’re in an accident, and your vehicle is deemed a
total loss
, your car insurance company will reimburse you according to the ACV of your vehicle. Gap insurance covers the remaining balance of your loan or lease—which may be more than your vehicle’s ACV—so that you’re not on the hook paying for a vehicle you no longer have.RECOMMENDED
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How does gap insurance work with Liberty Mutual?
Liberty Mutual offers gap insurance as a policy add-on provided you have full-coverage car insurance (i.e.
comprehensive
and collision coverage
). Gap insurance covers the difference between your comprehensive and collision payouts and the remaining balance of your loan or lease, so you’ll need to have these types of coverages to consider adding gap insurance to your policy.If you’re in an accident and your car is totaled, you can file a gap insurance claim with Liberty Mutual to pay for the remaining balance of your loan. Here’s how that would work:
- Let’s say you take out a $20,000 loan to buy a new car. You purchase gap insurance through Liberty Mutual to protect your investment.
- A few months later, you get into an accident and your vehicle is deemed a total loss. As a result of depreciation, at the time of the accident, your car was valued at $15,000 but you still owe $19,000 on your loan. Your collision insurance will only cover the ACV of the car—$15,000—so you would then have an outstanding loan payment of $4,000.
- Luckily for you, you have gap insurance! You’d simply file a collision claim and receive the $15,000, minus your deductible. From there, you can submit copies of your loan agreement and the collision insurance settlement to Liberty Mutual to get the remainder of your loan balance covered.
Keep in mind that Liberty Mutual gap insurance does not cover medical costs or lost wages. It also won’t cover repairs or allow you to swap a new car for your old one. Gap insurance is simply a way to avoid paying more money than a car you are no longer driving is worth.
If you’re a Liberty Mutual customer, you can
manage your policy online
, download the app, or call Liberty Mutual at 1-800-290-8711 to add gap insurance to your policy. If you’re a prospective customer, we recommend browsing car insurance quotes online
before deciding what policy is right for you.Gap insurance vs. new and better car replacement insurance
In addition to gap insurance, Liberty Mutual also offers “new car replacement insurance.” With this coverage, if your car is deemed a total loss after an accident, Liberty Mutual will replace it with a comparable replacement car.
Liberty Mutual also exclusively offers “better car replacement insurance,” which is similar to new car replacement insurance, but instead of providing you with a comparable vehicle after an accident, Liberty Mutual will give you one that is one year newer with 15,000 fewer miles than your current car.
Keep in mind that better car replacement coverage is not available for leased cars. It will not pay off any remaining auto loans. Gap insurance is often purchased with new car replacement or better car replacement insurance.
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4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversIs it better to buy gap insurance from the dealership or your insurance company?
It’s typically more expensive to purchase gap insurance
from the dealership
rather than your car insurance provider. If you purchase gap insurance from the dealership, the cost will be combined with your lease or loan payment
, which means you’ll be paying interest on it.If you purchase car insurance from your car insurance provider, on the other hand, the charge is typically only a few dollars a month, totaling between $20 and $40 per year.
Is gap insurance worth it?
In most cases, yes. If you are financing or leasing a vehicle, especially a relatively new one, gap insurance can save you from forfeiting thousands of dollars in a collision that already cost you your car.
Liberty Mutual charges approximately $40 per year for this coverage—a small investment for some profound benefits and peace of mind.
How to find the best gap insurance
Not all insurance providers carry gap insurance. In fact,
State Farm
and GEICO
, two of the nation’s most popular insurance companies, do not. If you’re a Liberty Mutual customer, you can go online or call your insurance agent to add gap insurance to your policy.If you’re presently uninsured, be sure to
compare quotes
from at least three insurance providers before making your final decision on gap insurance coverage."This app is all about savings!Jerryjust saved me $193/month on my car insurance. They literally found me the cheapest policies out there and with better coverage! Seriously, just sit back and watch Jerry work its magic.” —Rachel B.
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