The Best Gap Insurance Companies in Georgia

Gap insurance is optional in Georgia, but it’s invaluable for anyone with a new car loan.
Written by Jasmine Kanter
Edited by Amy Bobinger
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Gap insurance isn’t required by law in Georgia, but it can be a critical source of financial protection for anyone leasing or financing a new car. Should your vehicle be totaled or stolen, gap insurance will make up any difference between your remaining debt and insurance payout.
  • There are three sources of gap insurance in Georgia: dealerships, car insurance companies, and lenders such as banks and credit unions.
  • Of the three, you’ll find the cheapest gap coverage with an auto insurance company.
  • Not every car insurance company offers gap insurance. You’ll need to comparison-shop to find the best plans and prices.
Who’s got the right car insurance coverage? What should you look for? How do you comparison-shop in a jiffy? We’ll cover all that below.

How gap insurance works in Georgia

Gap insurance is an extra coverage option that promises to resolve your car debt if your vehicle is declared a total loss. 
What’s the point? you might say. That’s what car insurance is for!
It’s true—if you have a
full coverage car insurance
policy (including comprehensive and collision coverage) and your vehicle is stolen or destroyed, your insurance company will cut you a check. However, the payout—which corresponds to your car’s actual cash value (ACV)—may be less than your remaining
car loan
.
A new vehicle’s value begins to plummet as soon as you drive it off the lot—sometimes by as much as 20% within the first 12 months
1
. It’s not uncommon for consumers to end up with an
upside-down car loan
, meaning that their loan balance totals more than the value of their car. Depending on the amount of negative equity, you could be on the hook for hundreds or thousands of dollars if your car is destroyed.
That’s why gap insurance—also known as guaranteed asset protection—is so important. Gap insurance covers the difference between your car insurance company’s payout and the remainder of your debt. So even if your car’s market value is low, you can move on to a new car debt-free. It might even pay your insurance deductible!

Am I eligible for gap insurance?

When it comes to eligibility, every provider has different criteria, just as surely as they all have different formulas for
calculating car insurance rates
.
For gap coverage, car insurance companies generally require:
  • Your vehicle must be less than three years old
  • Your vehicle must have no significant damage or accident history
  • You must be the first (or sometimes second) owner
  • Your vehicle must fall within the provider’s value and mileage limits

When do you need gap insurance?

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When do you need gap insurance?
You need gap insurance if the coverage limits of your standard auto insurance policy fall short of the vehicle’s total value. 
Gap insurance is usually a good idea if you:
  • Lease your vehicle
  • Finance your car for an extended period (five years or more)
  • Make a low down payment on your vehicle (less than 20%)
  • Drive a highly customized vehicle or a specific make or model that depreciates quickly
  • Rolled over negative equity from a previous vehicle into your current loan

Most gap insurance in Georgia costs less than $10 per month

Gap insurance in Georgia usually costs between $20 and $300 per year, or $1–$25 per month. The vast majority of plans cost less than $100 per year unless you have a checkered driving record or claims history. Compare that to dealerships and banks, which typically charge a lump sum of $250–$700!
Gap insurance in Georgia must follow these laws:
  • Dealerships must provide a 30-day “free look period” during which time consumers may cancel gap coverage with a full refund
  • Dealership gap insurance cannot be sold as a condition for purchasing or leasing a vehicle
  • If the car loan or lease is terminated (by a total loss, payout, or other reason), the provider of a lump-sum gap insurance product must give the consumer a pro-rated refund
  • If the consumer wants to cancel gap insurance, they must give the insurance provider written notice within 90 days of their decision
Key Takeaway Gap insurance coverage is cheaper at a car insurance company than with a dealer or bank, but if you decide to buy a waiver, you have the right to a 30-day trial period.

Gap insurance companies in Georgia

Most major car insurance providers in the state of Georgia offer gap insurance. Here’s a sample of the gap coverage from the five biggest car insurance companies in the state:
  1. State Farm
    ’s Payoff Protector benefit is only available to auto loan customers, meaning it doesn’t count as an insurance product.
  2. Progressive
    calls its gap insurance “loan/lease payoff coverage” and limits any payouts to 25% of your vehicle’s MSRP. 
  3. Berkshire Hathaway bundles gap and mechanical breakdown insurance into a single product, dubbed “MPP” (Mechanical Protection Plan).
  4. Allstate
    only allows customers to add Allstate GAP to their vehicle at the time of purchase.
  5. USAA
    offers car replacement assistance—a “superior” form of gap insurance—that will give you an extra 20% on top of the actual cash value of your car after a total loss.
Technically speaking, State Farm and USAA don’t offer true gap insurance. Neither does
GEICO
, for that matter. That’s why it’s so important to compare car insurance companies to find the right products—not to mention the right pricing!
If you download the right
trustworthy insurance comparison app
, comparing personalized
car insurance quotes
is a cinch. All you have to do is sign up, enter some info about your current auto insurance policy, and wait for the best five to seven deals to appear on your smartphone. Take a look at App Store’s top-rated insurance app if you need a place to start (hint: it’s the
Jerry
app).

FAQ

Gap insurance in Georgia costs between $20 to $300 per year, with the majority of plans costing no more than $1–$5 per month. Your premiums could climb, however, if you have a bad driving record, a poor credit score, or the need to file an
SR-22 in Georgia
. Comparing car insurance quotes can help you find the cheapest deal for your situation.
Georgia car insurance laws
don’t require motorists to carry gap insurance. It’s an optional type of coverage that drivers may choose to purchase from a dealership, bank, or car insurance company. Gap insurance is recommended when a purchased or leased vehicle’s actual cash value threatens to fall behind its loan amount, as in cases with a long loan term or small down payment.
The Georgia Rules and Regulations guarantee consumers a 30-day free look period for gap insurance. If a consumer decides to cancel coverage during this time, the dealership, bank, or business that charged them a lump-sum price must provide a full refund. Beyond the 30-day free look period, gap insurance providers have no obligations to make a waiver cancelable or to guarantee a refund.

Sources

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