Does Progressive offer gap insurance?
No, Progressive doesn't offer gap insurance, but it does offer loan/lease payoff as an add-on to your car insurance policy, which is similar to gap insurance. It covers up to 25% of the vehicle's value in a total loss claim where you owe more than the vehicle is worth. You will need to carry both comprehensive and collision coverage to purchase loan/lease payoff insurance from Progressive.
The average cost of a full coverage policy that includes loan/lease payoff, or gap insurance, with Progressive, is $2,692.
Not all vehicles will qualify for Progressive loan/lease payoff insurance; older cars may not. Speak with a company representative to find out if your car qualifies.
Is Progressive loan/lease insurance worth it?
Progressive loan/lease payoff insurance is worth it if you owe more than your vehicle is worth and would need help paying off the loan or lease if your vehicle were totaled. Common scenarios where loan/lease payoff coverage is a valuable coverage include:
- 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
Because cars lose value more quickly than a loan or lease can be paid off, loan/lease payoff or gap insurance protects both you and the lender in the event of a total loss. A new vehicle loses 15% to 20% of its value as soon as it leaves the lot, Zack Shefska, CEO of CarEdge, an online vehicle marketplace, notes.
“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 [or loan/lease payoff] ensures the leasing company recovers the full loan amount if the car is totaled. Consumers should take note of this,” Shefska said.
Many leases require gap insurance, but even without a requirement, Shefska recommends buying gap insurance or a loan/lease payoff endorsementAn endorsement is a supplement or change to an insurance policy. It amends the original policy and can increase or decrease coverage, change names or update addresses., especially if you don't have a large down payment.
“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 Progressive?
A Progressive full coverage car insurance policy with gap insurance costs an average of $2,692 yearly, based on Insurance.com data. The average additional cost of adding loan/lease payoff coverage is $53 a year, but varies by state from $20 a year in Iowa and Ohio to $100 in Mississippi.
The table below shows average rates for a full coverage Progressive car insurance policy including 100/300/100 in liability coverage and comprehensive and collision with $500 deductibles, with and without gap coverage in each state.
| State | Average annual premium without gap coverage | Average annual premium with gap coverage |
|---|---|---|
| Alabama | $2,571 | $2,653 |
| Arizona | $2,118 | $2,152 |
| Arkansas | $2,374 | $2,464 |
| California | $2,199 | $2,229 |
| Colorado | $3,463 | $3,560 |
| Connecticut | $1,629 | $1,653 |
| Delaware | $2,011 | $2,057 |
| Florida | $3,364 | $3,398 |
| Georgia | $2,141 | $2,177 |
| Illinois | $1,835 | $1,877 |
| Indiana | $1,564 | $1,618 |
| Iowa | $1,377 | $1,397 |
| Kansas | $1,868 | $1,917 |
| Kentucky | $3,275 | $3,336 |
| Maine | $1,049 | $1,078 |
| Maryland | $2,405 | $2,438 |
| Massachusetts | $2,399 | $2,464 |
| Michigan | $3,263 | $3,314 |
| Mississippi | $1,884 | $1,984 |
| Missouri | $3,645 | $3,736 |
| Montana | $2,579 | $2,665 |
| Nebraska | $1,941 | $1,975 |
| Nevada | $3,747 | $3,788 |
| New Hampshire | $1,379 | $1,433 |
| New Jersey | $2,537 | $2,609 |
| New Mexico | $1,813 | $1,847 |
| North Dakota | $1,331 | $1,356 |
| Ohio | $1,729 | $1,749 |
| Oklahoma | $3,073 | $3,150 |
| Oregon | $1,965 | $2,025 |
| Pennsylvania | $2,292 | $2,313 |
| Rhode Island | $2,006 | $2,027 |
| South Dakota | $3,849 | $3,945 |
| Tennessee | $2,370 | $2,462 |
| Texas | $3,495 | $3,556 |
| Utah | $2,062 | $2,110 |
| Vermont | $913 | $948 |
| Virginia | $1,817 | $1,879 |
| Washington | $2,267 | $2,334 |
| Washington, D.C. | $1,988 | $2,070 |
| West Virginia | $1,688 | $1,726 |
| Wisconsin | $2,915 | $2,947 |
What does Progressive gap insurance cover and not cover?
Progressive gap insurance covers up to 25% of your vehicle's value after a covered total loss claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing. where you owe a remaining balance on your loan or lease.
| Covered | Not covered |
|---|---|
| Loan/lease balance up to 25% of the vehicle's value after ACV is paid | Loan or lease balances above 25% of the vehicle's value after ACV is paid |
| Total loss claims | Partial loss claims |
| Additional charges related to loan or lease, included excess mileage fees | |
| Your deductible |
Pros and cons of Progressive loan/lease insurance
Progressive's loan/lease coverage offers the same type of protection as a gap insurance policy, covering the difference between what you owe on your loan or lease and the actual cash value of the vehicle in a total loss. There is an extra cost for this coverage, which has benefits and drawbacks
Pros of Progressive loan/lease payoff coverage:
- Offers financial protection if your car is stolen or totaled
- Inexpensive when purchased from Progressive
- Pays up to 25% of the vehicle's value after the actual cash value settlement
Cons of Progressive loan/lease payoff coverage:
- Must have full coverage to add loan/lease payoff
- Coverage may not be available on older vehicles
- Only kicks in if your car is stolen or totaled and doesn't cover repairs
- Limits coverage to 25% of the vehicle's value
How to add Progressive loan/lease coverage to your policy
To add loan/lease coverage to your policy, contact Progressive either over the phone, with an agent in person or by logging into your Progressive account. Follow these steps:
- Confirm that your policy includes comprehensive and collision coverage. Both are required for a loan or lease and to add loan/lease payoff coverage.
- Confirm vehicle eligibility. Your vehicle must meet Progressive's requirements to be eligible for loan/lease payoff coverage.
- Request the addition of loan/lease coverage payoff to your policy. You may have to wait until renewal for the coverage to take effect; however, if you are adding a new vehicle to your policy, you can add it immediately.
- Confirm the cost and pay the additional premium.
When should you cancel Progressive loan/lease coverage?
You can cancel your loan/lease coverage once your loan amount is less than or equal to the vehicle's value. Triggers for cancelling gap insurance include:
- The loan amount reaches the actual cash value of the vehicle
- The vehicle is now too old to qualify for gap or loan/lease payoff coverage
- You've paid off your loan early or made extra payments to reduce the balance below the car's value
FAQ: Progressive loan/lease coverage
Does Progressive offer gap insurance on leased cars?
No, Progressive doesn't offer gap insurance, but it does offer loan/lease payoff coverage, providing gap coverage for leased cars. Many leases require gap insurance; confirm with the leasing company whether gap insurance is already included and, if not, if Progressive loan/lease payoff coverage meets the terms of your lease.
Is gap insurance included in a Progressive full coverage policy?
No, gap insurance isn’t included as part of a full coverage policy. However, you must have full coverage to add loan/lease payoff insurance, since it supplements collision and comprehensive coverage.
Does Progressive gap insurance have a payout limit?
Yes. Progressive's loan/lease payoff coverage, similar to gap insurance, has a payout limit of 25% of the vehicle's actual cash value before the loss, though limits vary by state.
What's the difference between Progressive gap insurance and traditional gap insurance?
Progressive's loan/lease payoff coverage differs from traditional gap insurance in terms of coverage limits and requirements. Progressive limits the payout on its loan/lease payoff coverage to 25% of the vehicle's value, and Progressive sets its own requirements for eligible vehicles.
Can you add loan/lease coverage to an existing Progressive policy?
Yes, you can add loan/lease payoff coverage to your existing Progressive policy. Your coverage may not take effect until the next policy renewal; confirm the coverage start date with Progressive.
How does Progressive gap insurance pay out after a total loss?
Progressive's loan/lease payoff coverage, like gap insurance, pays out after a total loss settlement is complete and the remaining balance on the loan is known. Progressive will pay the remaining balance, up to the limits of the policy, directly to the lender or leasing company.
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