Does GEICO offer GAP insurance?

Guaranteed asset protection or GAP insurance coverage is an optional auto insurance coverage that helps cover the gap between what you owe on an auto loan and the actual cash value of your vehicle. But at this time, GEICO does not offer GAP insurance. GEICO GAP insurance may not exist, but you can either purchase the coverage from a standalone company or switch to a company that does provide this insurance.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Apr 29, 2022

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Things to Remember

  • GEICO does not offer GAP insurance
  • You can purchase GAP insurance coverage from standalone companies
  • Other top auto insurance companies besides GEICO do sell GAP coverage

If you loan or lease your vehicle, you might need guaranteed asset protection (GAP) insurance as part of your loan agreement. But does GEICO offer GAP insurance?

Currently, GEICO auto insurance company does not offer GAP insurance coverage to drivers. However, keep reading to learn your options if you’re a GEICO policyholder. We’ll also discuss what GAP insurance is, if you need it, and provide you with recommendations for coverage options.

After learning about GAP insurance coverage, remember to enter your ZIP code into our free rate comparison tool above to compare quotes from the best companies in your region.

Does GEICO offer GAP insurance?

First, what is GAP insurance for cars? If you loan or lease a vehicle, it fills in the gaps between what you owe on your loan and the actual cash value (ACV) of your car in the event of a total loss. We’ll discuss GAP coverage in more detail later on. But unfortunately, there is no affordable GEICO GAP insurance available in any state for any driver.

That means there are no GEICO GAP insurance rates either because the coverage does not exist.

Don’t worry. If you’re a GEICO policyholder who needs GAP coverage as part of your auto loan or lease agreement, you still have some options.

First, consider switching to an auto insurance company that does offer GAP coverage.

Alternatively, some companies offer loan/lease coverage which typically works similar to GAP insurance but may be more limited. Otherwise, even though you can’t buy GEICO GAP insurance, you can purchase coverage from a standalone company or your dealership or bank. But GAP insurance rates through a dealership or bank are usually much higher than purchasing coverage from an insurance company. Plus, you pay additional interest because it’s part of your loan.

Unfortunately, at this time, the standalone insurance company, GapDirect, no longer accepts new applications, according to the company website.

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What does GAP insurance cover?

Exactly what is GAP insurance and what does it cover?

If you loan or lease a vehicle, GAP insurance covers the difference between the remaining principal of your loan and the actual cash value or ACV of your car in the event of a total loss.

But how does GAP insurance work? Imagine you total your car, but you still owe $25,000 on your auto loan.

Due to depreciation, let’s say the actual cash value or ACV of that vehicle determined by your insurance company is $20,000.

Without GAP insurance, your insurer only pays the ACV of your car, so $20,000. This leaves you responsible for the deficit out of pocket.

See more details in the table below.

GAP Insurance Example
DetailsCosts
Remaining auto loan principal$25,000
Actual cash value of vehicle$20,000
Insurance payment without GAP insurance$20,000
Deficit without GAP insurance$5,000
Insurance payment with GAP insurance$25,000
Deficit with GAP insurance$0
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So even though your vehicle is no longer driveable, you are still responsible for paying the remaining $5,000 on your auto loan out of pocket without GAP insurance.

But if you purchase GAP insurance, it will pay for the remaining deficit, minus any deductibles.

To review, what does GAP insurance cover? It covers the “gap” between the ACV of your vehicle and the remaining principal of your loan. A total loss occurs if your vehicle is stolen or totaled in a collision. Typically, only comprehensive coverage and collision insurance protect you in these scenarios.

For this reason, most insurance companies require you to purchase both collision and comprehensive auto insurance to qualify for GAP coverage.

The three policy types genuinely work in tandem with one another. But collision and comprehensive insurances usually have deductibles associated with them. Typically, GAP insurance does not cover your deductible, which may be anywhere from $500 to $2,000, depending on your policy details. So be sure you plan for these possible expenses.

You might be wondering, is GAP insurance worth it? It’s not necessary for every driver. According to the Insurance Information Institute (III), people who made less than a 20% downpayment on their vehicles should consider purchasing this coverage. Similarly, if you lease your vehicle, take out a long-term loan, or take out a loan for a car that depreciates quickly, it’s worthwhile coverage.

In some cases, GAP coverage may be required as part of your loan or lease agreement.

Once you owe less than what your car is worth, it’s typically safe to remove the coverage from your policy if you’re able to.

How much does GAP insurance cost?

How much is GAP insurance on average? It depends on if you use an insurance company or go through a dealership or bank. The cheapest option is to go through an auto insurance company.

If added to your auto policy, coverage averages anywhere from $20 to $40 per year.

Through a dealership or loan provider, it could cost you as much as $400 to $700.

What auto insurance companies offer GAP insurance?

Even though you can’t get GEICO GAP insurance quotes, you can purchase this coverage from many other best auto insurance companies. However, you usually need to buy collision and comprehensive insurance to qualify for GAP coverage. This may also be part of your loan or lease agreement.

Other companies to consider for GAP coverage include Allstate, Nationwide, Progressive, Travelers, and an honorable mention, State Farm.

We recommend Allstate auto insurance company because it covers the deductible associated with collision or comprehensive claims if your car is totaled or stolen.

Most companies do not cover those deductibles, which typically cost $500 to $1,000.

Nationwide auto insurance company does not cover the deductible costs but fills the gap between your remaining loan and the vehicle’s actual cash value.

Progressive auto insurance company covers up to 25% of the actual cash value of your car with its loan/lease payoff insurance coverage.

Travelers auto insurance company is often well priced but more limited. It only provides GAP insurance if you’re the vehicle’s original owner, meaning you must buy the car new from the dealership.

State Farm auto insurance company technically does not sell GAP insurance but offers Payoff Protector. However, it only applies if you get your loan from a State Farm Bank. You also need to be a State Farm policyholder, but the coverage is automatically a part of your loan agreement if you go through State Farm Bank.

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Does GEICO offer GAP Insurance? The Bottom Line

Unfortunately, GEICO does not offer GAP insurance to drivers. If you’re a GEICO customer who needs GAP coverage, consider comparison-shopping and switching insurance companies.

Many other top auto insurance companies sell GAP insurance or loan/lease coverage.

Alternatively, you can secure GAP insurance at a higher rate through a bank or dealership or from a standalone company if one exists near you.

Now that you know how to get insurance with GAP coverage, secure the right auto insurance for you by entering your ZIP code into our free quote comparison tool below.

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