Vermont gap insurance: Everything you need to know

How much does gap insurance cost in Vermont?

Gap insurance in Vermont costs $1,439 per year, on average, but rates vary by company. The value of your vehicle also affects the cost of gap coverage. Expensive or luxury cars usually depreciate faster than standard vehicles, so gap insurance may have to cover more, which increases the cost.

Cheapest gap insurance companies in Vermont

Progressive offers the cheapest gap insurance coverage in Vermont at $948 annually. Not all car insurance companies provide gap coverage, and rates differ widely by company.

See the table below to find the cheapest insurance companies for gap coverage in Vermont.

Company	Auto insurance rates with gap premium	Gap premium
Progressive	$948	$35
Auto-Owners	$1,039	$47
Nationwide	$1,230	$41
American Family	$1,240	$55
Vermont Mutual	$1,424	$71
Farmers	$2,756	$144

Read our methodology

Average gap insurance cost in Vermont by city

Alburgh has the highest gap insurance rates at an average of $1,511 a year, while Montpelier offers the lowest at an average of $1,383 per year. Where you live in Vermont affects your insurance rates. Cities with higher crime and theft have higher insurance costs because your vehicle is at a greater risk of being damaged or stolen.

The table below lists the average gap insurance rates by city in Vermont.

City	Auto insurance rates with gap premium	Gap premium
Montpelier	$1,383	$63
Barre	$1,383	$63
Vergennes	$1,400	$65
South Burlington	$1,424	$59
Burlington	$1,432	$60
Perkinsville	$1,439	$66
Rutland	$1,451	$66
Derby	$1,485	$70
Jeffersonville	$1,487	$70
Alburgh	$1,511	$70

Read our methodology

How much is gap insurance in Vermont by age group?

Gap insurance coverage for an 18-year-old driver costs $4,707 a year and costs $1,831 annually for a 25-year-old driver. Car insurance costs more for younger drivers because they are more likely to take risks and have less experience avoiding accidents. However, rates decrease as drivers get older.

Here are the gap insurance rates in Vermont for different age groups.

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$4,707	$209
Young adult	$1,831	$83
Adult	$1,439	$65
Senior	$1,316	$58

Read our methodology

How does gap insurance work in Vermont?

Right after you buy or lease a new car, it depreciates, causing you to owe more than the car is worth. If your car gets totaled, your insurance company pays only the car's actual cash value. This payout may leave you still owing money on the loan. That's where gap insurance helps. If someone totals or steals your car, gap insurance pays the difference between your car's value and the amount you still owe on the loan.

"Gap is designed for people that take long-term loans and/or roll taxes, service plans, or warranties into their loan," said Zack Pope, agency manager at David Pope Insurance in Missouri. "Most gap coverages only go a certain percent over market value to pay off a loan for a totaled vehicle (typically 25%). It costs significantly less money to get gap through your insurance than to purchase it from the dealership."

For example, let's say you have a $40,000 car loan, but your vehicle's actual cash value is only $35,000. If the car is stolen, your insurance company will reimburse you $35,000, minus your deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim.. Gap insurance would cover the remaining $5,000 that you still owe on your loan. Without gap insurance, you'd be responsible for paying this difference out of pocket.

Once your loan is less than the value of your car, you can drop gap coverage. While you can always cancel gap insurance, you may be unable to add it anytime. Most insurers want you to add the coverage quickly after buying a car.

Additionally, many lenders require gap insurance when getting your loan. Although you can get gap coverage through your lender or car dealership, adding it to your current auto policy is usually cheaper.

Where to buy gap insurance in Vermont

Many insurance companies, including major carriers, offer gap insurance in Vermont. It's relatively easy to add coverage to your current auto insurance policy.

Adding gap coverage to your auto insurance policy is usually the most cost-effective option. While you can purchase gap coverage from most car dealers and lenders, those policies tend to be more expensive, making it a less attractive option.

Methodology

We gathered car insurance rates with and without gap insurance through our data partner, Quadrant Information Services.

Averages are annual and based on our full coverage data set. This data set is based on:

Bodily injury liability of $100,000 per person and $300,000 per incident
Property damage liability of $100,000 per incident
Comprehensive and collision deductibles of $500
40-year-old driver
Honda Accord LX
Good credit
A clean driving record
12-mile commute, 10,000 annual mileage

To show the cost of gap insurance, we have compared rates with gap insurance added to the averages without gap insurance, and the difference is shown as the annual cost of gap insurance.

Rates are based on an analysis of over 5 million data points in all 50 states and Washington, D.C. from 138 companies.

Vermont gap insurance: FAQs

Is gap insurance required in Vermont?

Gap insurance isn't required by law in Vermont, but your lender may require you to have the coverage.

Who should buy gap insurance in Vermont?

You may need gap insurance if you have a car loan or lease in Vermont. Drivers who make a small down payment typically owe more than the vehicle is worth since cars depreciate faster than the loan is paid down, making gap insurance a good idea.

You don't need gap insurance if you own your car or make a large down payment.

What is standalone gap insurance in Vermont?

Standalone gap insurance is a separate policy, not part of your car insurance. You can buy it from your lender or a private company.

Does gap insurance cover leased cars in Vermont?

Vermont gap insurance covers leased cars when the driver owes more than the vehicle's current market value. You can drop gap coverage once your car is worth more than what is owed.