GEICO does not sell gap insurance directly, but you can buy it from other sources while keeping your GEICO car insurance

Gap insurance covers the difference between what you owe on a car loan and what the car is worth if it's totaled. GEICO's standard auto policies do not include this coverage. However, you are not locked into buying gap insurance from GEICO just because you have your car insurance there — you can purchase it separately from your lender, a dealership, or a third-party gap insurance company, and layer it on top of your existing GEICO policy.

Whether you need gap insurance depends on your down payment and loan terms. If you put down less than 20 percent on a financed car, or if you're financing a vehicle that depreciates quickly, gap insurance can protect you from owing money after a total loss. If you paid cash or have a large down payment, you likely don't need it.

Key Takeaways

  • GEICO does not offer gap insurance as part of its auto insurance products, but you can buy it elsewhere and use it alongside GEICO coverage.
  • Gap insurance is most useful if you financed a car with less than 20 percent down or if you're driving a vehicle that loses value quickly.
  • You can purchase gap insurance from your lender, the dealership where you bought the car, or a standalone gap insurance company.
  • Gap insurance costs between $10 and $25 per month when bought separately, though dealership prices are often higher.

Where to buy gap insurance if you have GEICO

Your lender — the bank, credit union, or financing company holding your car loan — often offers gap insurance at the time you sign loan paperwork. This is usually the cheapest option and the easiest to set up, because the premium gets rolled into your monthly car payment. Ask your lender directly whether gap insurance is available and what it costs per month.

Dealerships also sell gap insurance, typically at the point of sale when you're buying or leasing a car. Dealership gap insurance is convenient but usually costs more than buying it from your lender or a third party. If the dealership offers it, compare the price to what your lender quoted before deciding.

Third-party gap insurance companies sell policies you can purchase online or by phone. These companies specialize in gap coverage and often charge less than dealerships. You can buy from them at any time — not just when you're financing a car — which makes them useful if you didn't purchase gap insurance upfront and now want it. Common providers include SafePoint, CarShield, and Endurance, though availability varies by state.

How gap insurance works alongside your GEICO policy

Gap insurance and your GEICO collision or comprehensive coverage serve different purposes and work together. GEICO's collision coverage pays for damage to your car from accidents; comprehensive covers theft, weather, and vandalism. Both policies pay out based on your car's current market value, not what you owe on the loan.

If your car is totaled and you owe $18,000 on the loan but the car is worth $14,000, GEICO's collision or comprehensive coverage pays $14,000. You would still owe $4,000 to your lender. Gap insurance covers that $4,000 gap. The two policies don't conflict — gap insurance straightforward fills in what GEICO's payout doesn't cover.

You'll file a claim with GEICO first for the accident or loss. Once GEICO pays out, you then file a separate claim with your gap insurance provider for the remaining balance. Your gap insurance company will pay your lender directly or reimburse you, depending on the policy terms.

When gap insurance makes sense

Gap insurance is most useful in these situations: you financed a car with a down payment of less than 20 percent; you're financing a new car that depreciates quickly in the first few years; you have a longer loan term (72 months or more); or you're leasing a vehicle. In any of these cases, you're likely to owe more than the car is worth for at least part of the loan period.

Gap insurance is less necessary if you paid cash for your car, made a down payment of 20 percent or more, financed a used car that has already depreciated, or have a short loan term. In these situations, the car's value is closer to what you owe, so the gap is smaller or doesn't exist.

Run the numbers yourself: find your car's current market value using Kelley Blue Book or NADA Guides, then subtract that from what you still owe on the loan. If the difference is significant, gap insurance is worth considering.

Cost and coverage limits

Gap insurance purchased separately from your lender typically costs $10 to $25 per month, depending on the provider and your car's value. Dealership gap insurance often costs $500 to $1,500 upfront, which is why buying from your lender or a third party is usually cheaper. Some lenders include gap insurance at no extra cost, especially for new car loans, so always ask.

Most gap insurance policies cover the difference between what you owe and the car's market value, up to a limit. Some policies exclude certain costs like extended warranties, custom parts, or rental car fees. Read the policy details carefully to understand what is and isn't covered. If you have outstanding tickets or other liens on the car, those may not be covered by gap insurance.

What happens if you cancel your GEICO policy

If you switch car insurance companies away from GEICO, your gap insurance policy remains separate and unaffected. Gap insurance is tied to your car loan or the policy you purchased it through, not to your auto insurance provider. You can keep your gap insurance with your new insurance company without any problem.

If you paid for gap insurance upfront through a third-party provider, it stays active regardless of which insurance company you use. If your gap insurance is bundled with your lender's loan, it continues as long as you have the loan. Only if you paid for gap insurance through GEICO directly (which GEICO does not offer) would you need to replace it — but since GEICO doesn't sell it, this situation doesn't explore.

Frequently Asked Questions

Can I buy gap insurance after I've already financed my car?

Yes. You can purchase gap insurance from a third-party provider at any time while you still owe money on the loan. You cannot buy it from your lender after the loan is already active, but standalone gap insurance companies will sell you a policy. The sooner you buy it, the better, because gap insurance is most valuable early in the loan when depreciation is steepest.

Does gap insurance cover me if I'm in an accident but the car isn't totaled?

No. Gap insurance only pays out if your car is declared a total loss by your insurance company. For accidents where the car is repaired, your GEICO collision coverage handles the repair costs. Gap insurance has no role unless the damage is so severe that the car is totaled.

What if I lease a car instead of financing it?

Leased cars often come with gap insurance included in the lease agreement, so check your lease paperwork first. If it's not included, gap insurance is especially important for leases because you're responsible for the car's value if it's totaled. Ask your leasing company whether gap coverage is built in before buying it separately.

Will GEICO's collision coverage pay out the full amount I owe on my loan?

No. GEICO pays the car's current market value, not the loan balance. If you owe more than the car is worth, you'll owe the difference to your lender unless you have gap insurance. This is why gap insurance exists — to protect you from that shortfall.