Vermont gap insurance: Everything you need to know

How much is gap insurance in Vermont?

In Vermont, gap insurance costs an average of $1,439 per year, but prices vary by company. Your car's value also affects the cost of gap insurance. Expensive or luxury cars depreciate faster than standard vehicles, so gap coverage may have to pay more, leading to higher rates.

Cheapest gap insurance companies in Vermont

The cheapest gap insurance in Vermont is offered by Progressive, with an average yearly cost of $948. Not all car insurance companies provide gap coverage, and rates can vary significantly among carriers.

Take a look at the table below to see the cheapest Vermont insurance companies for gap coverage.

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 is the most expensive to buy gap insurance with an average rate of $1,511, and Montpelier is the cheapest with an average of $1,383. Where you live in Vermont can affect your insurance rates. Auto insurance rates are higher in cities with more crime and theft since your vehicle is more likely to be damaged or stolen.

This table shows the average gap insurance rates by city for 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

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How much is gap insurance in Vermont by age group?

Gap insurance rates are higher for younger drivers because they have less experience and are more likely to take risks while driving, increasing the odds of a total loss. As drivers get older, their rates go down. For example, an 18-year-old pays an average of $4,707 per year, while a 25-year-old pays around $1,831 annually.

The table below lists the average gap insurance rates in Vermont based on age.

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

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How does gap insurance work in Vermont?

When you buy or lease a new car, depreciationDepreciation is the decrease in your car's value over time due to wear and tear, age and mileage. Depreciation is used to determine the actual cash value of a vehicle in the event of a total loss. can quickly cause you to owe more than the car is worth. If your car is totaled, the insurance company will only pay out the car's actual cash value, which may leave you owing on the loan. That's where gap insurance comes in. If your vehicle is totaled or stolen, gap insurance covers the difference between your car's value and the loan payoff.

"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.

You can drop gap coverage once your loan balance is below your car's value. While you can cancel gap insurance anytime, you may not be able to add it later. Most insurers require you to add gap coverage soon after buying a car.

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

Insurance.com commissioned gap insurance rates from Quadrant Data Services in late 2023 at a variety of ages in all 50 states and Washington, D.C. Base rates use a 40-year-old driver with a 2023 Honda Accord LX. Rates were gathered from 138 insurance companies in 1,468 ZIP codes.

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 vehicle or make a large down payment so that you owe less than the car's value from the start of your loan.

What is standalone gap insurance in Vermont?

Standalone gap insurance is a policy of its own, not connected with your car insurance. Gap insurance is available from your lender or a private company as a separate policy.

Does gap insurance cover leased cars in Vermont?

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