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Does Erie Insurance offer gap insurance?
I recently financed a new car, but declined gap coverage at the dealership. It just didn’t seem worth the cost, but now I’m wondering if I shouldn’t just add it to my car insurance policy to be safe. I’m currently insured with Erie—do they offer gap insurance?
Kathryn Mae Kurlychek · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
The short answer is: yes,
Erie Insurance
does offer gap coverage
to its customers. But there are some stipulations—like the fact that it’s only available in certain states and must be added to a policy that already includes comprehensive
and collision coverage
. If you’re wondering whether or not you need a gap insurance policy from Erie, here’s how it works:
- Let’s say you just financed a brand-new $25,000 vehicle. As soon as you drive it off the lot, that vehicle’s value immediately depreciates—often faster than your loan payments.
- Now imagine you’re visiting a friend a few months later, and your brand-new vehicle is parked in the driveway. A storm rolls through, causing a huge tree branch to come crashing down on your new car. It’s declared a total loss by your insurance company—but since its value has depreciated, they only write you a check for $22,000. Your loan still demands $23,000—meaning now you have to pay over $1,000 out of pocket on top of replacing your car.
- With gap insurance from Erie, the difference between what your new car is worth and what you still owe on your loan will be covered—so you don’t have to front any unexpected bills. In other words, it covers the financial “gaps” between your car’sactual cash valueand what you owe on your car loan.
Gap insurance typically isn’t required—but it can bring extra peace of mind, and typically costs between just $20 and $40 per year to add. If your financed vehicle is less than two years old, you may be eligible to add gap coverage to your Erie insurance policy.
View full answer
- Gregory R.
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