Farmers gap insurance

Does Farmers offer gap insurance?

Farmers 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 Farmers.

Opting for gap coverage from an insurer, such as Farmers, is a financially savvy move. With Farmers, you can secure gap insurance at an average annual rate of $4,178. This coverage kicks in if your car is stolen or totaled.

Not all vehicles will qualify for Farmers gap insurance; older cars may not. Speak with a company representative to find out if your car qualifies.

Is Farmers gap insurance worth it?

Generally, Farmers 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 Farmers 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 Farmers?

Farmers gap insurance averages $4,178 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 Farmers car insurance with and without gap coverage in each state.

Pros and cons of Farmers 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 Farmers gap insurance include:

• Offers financial protection if your car is stolen or totaled
• No deductible
• Inexpensive when purchased from Farmers

Cons of Farmers 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

Compare Farmers gap insurance vs. other companies

Most major insurers, including Farmers, offer gap insurance. Like other forms of coverage, rates vary by state, driver, and insurer. To get the most affordable gap insurance, compare rates from multiple insurers.

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