How does gap insurance work?

Gap insurance protects you from depreciation. Sometimes, your car can depreciate (meaning its value drops) significantly the second you buy it. For example: A $30,000 car could drop to $27,000 when you drive it off the lot. That then leaves a "gap" between your loan amount and your car's value. If it's totaled, Progressive will pay off that gap (minus your deductible)—up to 25% over your car's value.

Amount you get without gap insurance


Amount you get with gap insurance


Example: You finance $30,000 for a new car. You've had it for a few years and have been making all of your payments. It's now worth $20,000 and you owe $25,000 on your loan. That's your $5,000 gap. If you total it, we'll pay you $25,000 (minus your deductible). Without gap insurance, you'd only get $20,000 (minus your deductible).

Keep in mind, you must have comprehensive and collision coverage on your policy to qualify for gap insurance. See more on comprehensive or collision.

What does gap insurance cover?

Gap insurance applies any time your vehicle is totaled from physical damage and your insurance pays out. At Progressive, there are no situations in which we'll tell you that your car insurance covers your damages but your gap insurance does not apply.

How much is gap insurance?

At Progressive, gap insurance only costs about $5 a month on average. It's a very affordable coverage that can provide a good bang for your buck, especially if there's a big gap between your car's value and the balance left on your loan. To see if it's worth it for you, just ask yourself if you'd want to pay off that gap…while you're trying to buy a new car. If not, add gap insurance.

Looking for an exact price for gap insurance? Get a car insurance quote online and we'll show you in just a few minutes.

Add gap insurance if your loan amount is more than your car's value.

How long does gap insurance last?

Once you add gap insurance, it can apply for as long as the life of your policy. If you ever do want to remove it, you can simply make that change online or give us a call. To remove this coverage, or call 866-749-7436.