Auto loan protection
Auto loan protection is an insurance product that pays off your auto loan if you die, become disabled, or involuntarily lose your job before the loan term ends. Lenders such as Wells Fargo and Ally offer auto loan protection policies ranging from $10 to $50 per month depending on coverage amount.
If you lose your job, auto loan protection covers monthly payments for up to 12 months, with caps set by the insurer–for example, CNA National limits payouts to $1,000 per month. Car buyers with loans exceeding 60 months or negative equity often purchase auto loan protection to prevent financial strain during crises.
Most policies require enrollment within 30 days of purchasing a vehicle or signing a new loan agreement. If you refinance your car loan, many providers such as State Farm allow transferring your protection plan to the new contract without penalty.
Exclusions typically include self-inflicted injuries, fraud, or voluntary resignation–Nationwide’s policy excludes coverage in these cases, as reported by Your Insurance Info. Some banks bundle auto loan protection with gap insurance or extended warranties for added consumer convenience.
Claims must be filed within a specified timeframe; for example, Chase requires claim submission within 90 days of loss event occurrence. The Federal Reserve notes that most dealerships mark up premiums by 25% over direct insurer pricing.
You can cancel auto loan protection at any time and receive a prorated refund for unused coverage, as required by state law in states like California and Texas.
How much is GAP insurance?
Gap insurance is an optional car insurance coverage that helps pay off a loan if the vehicle’s value has depreciated below its outstanding loan balance. The cost of gap insurance varies from provider to provider, but typically ranges from $20-40 per month for cars up to 3 years old and $50-100 per month for cars…
What does gap insurance cover on a used car?
Gap insurance covers the difference between what a driver owes on an automobile loan and the car’s actual cash value if it is declared a total loss. It essentially bridges the gap between an insurance company’s payout for a totaled vehicle and what is still owed on it through financing. This can be especially helpful…
Where can you get gap insurance?
Gap insurance is available from a variety of providers, including car dealerships, banks, and insurance companies. Many online insurers also offer gap coverage for vehicles at competitive rates. Many auto loan lenders provide gap protection options that may be included in the financing agreement. Consumers should compare their options to find the best deal when…
Should you purchase gap insurance on a new car?
Gap insurance can provide added financial security when purchasing a new car. It covers the difference in what you owe on your vehicle loan and the amount you receive from your auto insurance if your vehicle is totaled or stolen. If you are buying a car with little or no money down, gap insurance may…
Can I purchase gap insurance?
Yes, you can purchase gap insurance. Gap insurance is a type of car insurance coverage designed to cover the difference between what is owed on a vehicle loan and the market value of the vehicle at the time of an accident or other covered event. Depending on your insurer, gap insurance may also be referred…
From whom can I get gap insurance?
Gap insurance can typically be obtained from a car dealer, auto finance company, or an independent insurance provider. Some auto loan providers include gap insurance coverage when financing a vehicle, but the coverage may not always be included in the loan agreement. Independent insurers may offer cheaper rates on gap insurance than car dealerships, so…
What does gap insurance pay for?
Gap insurance pays for the difference between the amount of a vehicle’s actual cash value and the balance still owed on a loan or lease. It can be used if a vehicle is totaled or stolen and an owner owes more than what their auto insurance will cover. Gap insurance helps to protect drivers who…
Who does gap insurance cover?
Gap insurance covers the difference between the cash value of a vehicle and what is owed on its loan. Gap insurance applies in situations where a car has been totaled or stolen and the insurer will not pay out enough to cover the balance due on the loan. It provides financial protection for individuals who…
Can I get gap insurance later?
Yes, you can get gap insurance later. Gap insurance is a policy designed to protect vehicle owners in the event of an accident where the payout from their comprehensive or collision coverage does not fully cover the amount owed on their car loan. Gap insurance is available for purchase at any point during your auto…
Can you add gap insurance after purchase?
Yes, gap insurance can be added after the purchase of a car. Gap insurance is typically offered by auto insurers and helps to bridge the difference between what you owe on your car loan and what your car is worth in the event of an accident or theft. Depending on your insurer’s guidelines, it may…
What is collateral insurance on a car?
Collateral insurance on a car is coverage that provides financial protection for an automobile lien holder in the event of physical damage to or theft of the vehicle. It covers costs associated with repairing or replacing the car, up to its fair market value. Collateral insurance is usually purchased from a lender and is typically…
Does Progressive Insurance offer GAP insurance?
Yes, Progressive Insurance offers gap insurance. Gap insurance is an optional coverage that helps pay off a car loan or lease balance if the vehicle is totaled or stolen and the market value of the vehicle is less than the amount still owed on it. It helps bridge the difference between what you owe and…
See also Auto loan requirements.