Guide to Gap Insurance in Georgia

Gap insurance, which stands for guaranteed asset protection, covers the difference between what you owe on your car loan or lease and the car’s actual value if it’s totaled or stolen. If your vehicle is worth less than what you still owe, gap insurance pays the remaining balance, so you’re not stuck paying out of pocket for a car you no longer have. It’s especially useful for new cars, which can lose value quickly.

What Does Gap Insurance Cover?

• Total losses from physical damage
• Uncovered theft of the entire vehicle
• The remaining amount you owe on your loan/lease after either of the above two incidents

What Does Gap Insurance Not Cover?

• The cost of a new car
• Collision or comprehensive deductible
• Missed loan payments or late fees
• Total losses of vehicles from mechanical issues, including engine failure
• Bodily injuries
• Lost wages
• Funeral costs

Imagine you buy a new car, and a few months later, total it in an accident. You have $25,000 left on the loan, but your insurance company values the car at only $20,000 due to depreciation. After your $500 deductible, you get a $19,500 payout. Gap insurance would cover the $5,000 “gap” between the actual cash value (ACV) and the remaining loan balance, preventing you from having to pay out of pocket for a car you no longer have.

Note that gap insurance does not cover the cost of a replacement vehicle. Some insurance companies offer new car replacement or better car replacement as policy add-ons, which would pay for a replacement vehicle.

See how much gap insurance in Georgia costs with our proprietary data below.

By Provider

To find the cheapest gap insurance in Georgia, it’s best to buy it as an add-on to an existing policy. It will be much more expensive if you purchase it from your car manufacturer, dealership, or lender. Credit unions tend to have better gap insurance rates than banks.

By Company

The following companies offer gap coverage in Georgia. We’ve also reviewed the best gap insurance companies nationwide.

In Georgia, lessors can’t force people to buy gap insurance as a condition of a lease or an auto loan. Here are some other laws surrounding gap insurance in Georgia:

• You can pay either in a single payment or on a monthly/periodic payment plan.
• In the gap insurance waiver, companies must disclose the purchase price and terms, the cancellation and refund policy, and the name and address of all involved parties.
• There must be a “free look” period in which customers can cancel their gap waivers for a full refund. Beyond that period, they must cancel within 90 days before the expiration date, and the request for cancellation must be in writing.

If gap insurance providers do not follow the laws, they’ll have to cease and desist their operations and pay a per-violation fine between $500 and $10,000.¹

How Much Gap Insurance Do You Need?

Ideally, the amount of gap insurance you get should be equal to the amount on your auto lease or loan. That way, you can be sure that you won’t have to pay anything out-of-pocket to complete your loan or lease if your car is stolen or totaled.

Some gap policies limit how much you can receive — for example, Progressive’s loan/lease payoff pays for up to 25 percent of the car’s cash value.

Use a source like Kelley Blue Book or Edmunds to approximate your car’s value, and subtract its value from your remaining loan balance to get a sense of how much protection you need.

Since Georgia prevents companies from requiring gap insurance, it’s your choice whether you want to buy it, and it doesn’t make sense for all parties.

You should get gap insurance if:

• You leased your vehicle.
• You owe more on your car than it’s worth.
• You put down less than 20 percent on your loan.
• Your loan or lease term is five years or more.
• You rolled over negative equity from an old car loan to a new car loan.²

There are many ways you can get gap insurance. You can buy it at the same dealership where you purchased your car, from your car’s manufacturer, a credit union or bank, or from an insurance company (either as an add-on to an existing policy or as a stand-alone waiver). We recommend buying gap insurance from your insurance company, ideally as an add-on, to get the lowest price. The cheapest and best Georgia insurance companies for gap waivers are:

• Auto-Owners 
• GEICO
• Nationwide
• USAA

Gap insurance pays for the difference between what you owe and your car’s value in the event of a total loss, and can save you from paying thousands of dollars out of pocket if you’re underwater on your car loan.

In Georgia, your lender cannot force you to buy gap insurance as a condition of your loan. The state has regulations in place that govern gap insurance providers, with potential fines for companies that do not comply with the laws. These measures aim to prevent predatory practices and give consumers more choice in whether to purchase gap coverage.

Generally, you will find the best gap insurance rates from an insurance provider or credit union. Learn more about gap insurance, which in some states other than Georgia, loan or lease providers can require as a term of the loan/lease.