Does Allstate offer gap insurance?
Allstate offers gap insurance as an add-on to your car insurance policy. You will need to carry both comprehensive and collision coverageCollision coverage helps pay for repairs or replacement of your car if it's damaged in an accident, regardless of who is at fault and is subject to a deductible. in order to buy gap insurance from Allstate.
Opting for gap coverage from an insurer, such as Allstate, is a financially savvy move. With Allstate, you can secure gap insurance at an average annual rate of $4,066. This coverage kicks in if your car is stolen or totaled.
Not all vehicles will qualify for Allstate gap insurance; older cars may not. Speak with a company representative to find out if your car qualifies.
Is Allstate gap insurance worth it?
Generally, Allstate gap insurance is worth it in certain circumstances, including:
- You make less than a 20% down payment
- Your vehicle depreciates faster than normal
- You roll negative equity into a new car loan
- You finance a car for more than 60 months
- You lease a vehicle
By adding Allstate gap insurance to your policy, you're making a sound financial decision. This coverage prevents you from facing significant out-of-pocket costs.
“The moment a new car is driven off the lot, it loses value—often 15% to 20%—but the loan balance doesn’t drop nearly as quickly. Gap insurance ensures the leasing company recovers the full loan amount if the car is totaled. Consumers should take note of this,” said Zack Shefska, CEO of CarEdge, an online vehicle marketplace.
“Even if a lender does not require gap insurance, it is a good idea to consider if [buyers] are not putting a lot of money down, and the policy can typically be cancelled in the future. It’s generally safe to cancel it once the loan balance is less than the car’s market value. That usually happens midway through a standard loan term or sooner if you made a significant down payment or extra principal payments,” he said.
For example, let’s say your car loan is $50,000, but your car is worth only $40,000 and gets totaled in an accident. Your insurance only pays the actual cash valueActual Cash Value (ACV) is the current market value of your car, considering depreciation. It's the amount your insurance will pay if your car is totaled or stolen. of your vehicle, which is $40,000, leaving you with a $10,000 difference to pay off the loan. Gap insurance pays that $10,000 for you. Note that you will also have to pay your deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim..
How much is gap insurance from Allstate?
Allstate gap insurance averages $4,066 yearly, but rates vary based on numerous factors, including where you live and the type of vehicle you’re insuring.
The table below shows average rates for Allstate car insurance with and without gap coverage in each state.
| State | Average annual premium without gap coverage | Average annual premium with gap coverage |
|---|---|---|
| California | $2,789 | $2,893 |
| Florida | $4,783 | $4,832 |
| Kentucky | $4,026 | $4,162 |
| Michigan | $5,470 | $5,764 |
Pros and cons of Allstate gap insurance
Not all situations call for gap insurance. Weigh the advantages and disadvantages of gap insurance to determine if the coverage is right for you.
Pros of Allstate gap insurance include:
- Offers financial protection if your car is stolen or totaled
- No deductible
- Inexpensive when purchased from Allstate
Cons of Allstate gap insurance include:
- Must have full coverage to add
- Coverage may not be available on older vehicles
- Only kicks in if your car is stolen or totaled and doesn't cover repairs
FAQ
Does Allstate offer gap insurance on leased cars?
Allstate may offer gap insurance for leased cars. It depends on the terms of your lease, which may already include gap insurance.
Is gap insurance included in a Allstate full coverage policy?
Gap insurance isn’t included as part of a full coverage policy. However, you do have to have full coverage to add gap insurance since it supplements collision and comprehensive coverageComprehensive coverage helps pay for damage to your car caused by events other than a collision, such as theft, fire, vandalism, or natural disasters. It is subject to a deductible..
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