Does Erie Have Gap Insurance?
Erie offers gap insurance and other valuable coverage as part of their New Auto Security endorsement.
Written by Jasmine Kanter
Reviewed by Kaitlin May
Erie offers gap insurance in a bundle called New Auto Security. Customers need to have purchased both comprehensive and collision coverage to access New Auto Security, which covers a totaled or stolen car with a loan balance greater than its value at the time of the loss.
Since this type of
car insurance
can be a little tough to decipher, we’re breaking down all there is to know about Erie’s offerings regarding gap insurance
. We’ll walk you through what it is, who to buy it from, and how much it could cost if you add New Auto Security to your policy.Does Erie Insurance offer gap insurance?
What is gap insurance, exactly? Guaranteed Asset Protection (gap insurance) pays the remaining balance of your car loan in the event of a
total loss
. Because cars depreciate so quickly, your vehicle's actual cash value (ACV)
will probably drop faster than you can pay it off. If your car is wrecked or stolen, the insurance payout may not cover the remainder of your debt—leaving you with loan payments on a car you don’t even own anymore.
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How does gap insurance work with Erie?
You can add Erie’s New Auto Security with gap insurance to an existing policy at any time—not just when you purchase your car.
A New Auto Security endorsement is only available to Erie insurance customers who have bought both
comprehensive
and collision coverage
. Coverage is sold per vehicle, not per policy. For example, if you have two cars on one full-coverage car insurance
policy, you'll have to buy two gap insurance endorsements.The package includes four types of coverage that make transitioning to a new car after an accident as painless as possible. Here’s what customers get with Erie’s New Auto Security bundle:
- Gap insurance: covers the difference between the actual cash value of a vehicle and the amount due on its lease or loan at the time of loss
- New car replacement insurance: covers the difference between the cash value of a vehicle and the price of a new one at the same trim level
- Better vehicle replacement: covers the difference between the cash value of a vehicle and the price of the same model that’s two years newer
- Repair coverage: reimburses repairs without deducting money for the cost of depreciation
Gap insurance vs. loan/New auto security
With a New Auto Security bundle, you’re getting a more robust policy that covers several different scenarios after a total loss—gap insurance is just one of four coverages included.
Is it better to buy gap insurance from the dealership or your insurance company?
It’s almost always more expensive to
get gap insurance from a dealer
, bank, or credit union
because the cost will be included in your loan—meaning you’ll have to pay interest.The gap insurance sold by lenders is charged as a lump sum payment between $400 and $700. If you borrow with an average car loan interest rate of 5%, you’ll end up paying from $20 to $35 in extra charges. Plus, the gap insurance offered by
in-house financing
might not include any bonus coverage.However, gap insurance sold by car insurance companies usually adds only a few dollars per month to your premium. It costs between $20 and $40 per year. Even if you had a 60-month loan term, you’d only end up paying $100 to $200 over the lifetime of your loan. And because Erie's New Auto Security package offers more coverage, it’s an incredible deal.
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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 gap insurance worth it?
In most cases, gap insurance is a worthwhile investment. The initial cost is low, the potential payout is high, and it adds an extra layer of financial security to a long-term commitment. Gap insurance is highly recommended for those who’ve chosen a 60 or
72-month loan
.It also pays to know whether you’re buying one of the
cars with the highest depreciation rates
. A new Audi A6
or Volvo S60
will lose over 50% of its value over the next five years, whereas the stalwart Jeep Wrangler Unlimited Sport
will be able to fetch up to 70%! Combine a rapidly-depreciating vehicle with the average used car interest rate
and you’ve got a recipe for financial disaster. Not to mention, leasing a car typically means you’ll be required to purchase gap insurance anyway, so verify the terms of your lease agreement if you go that route.
How to find the best gap insurance
and
GEICO
are two top providers that don’t sell gap insurance. To learn whether or not Erie’s New Auto Security is your best option, gather quotes from at least three different with gap insurance to find the lowest rate for your needs."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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