Does Geico Offer Gap Insurance?

Buying a car can be an expensive investment. In addition to the cost of the vehicle itself, there are also various expenses involved in owning and operating a car, such as fuel, maintenance, and insurance. Car insurance is one of the most crucial expenses, as it protects you financially in case of an accident or theft. But what happens if your car gets totaled or stolen, and your insurance payout is not enough to cover your outstanding loan or lease balance? This is where gap insurance comes into play. In this article, we will explore the question of whether Geico offers gap insurance, and what you need to know about this type of coverage.

What is Gap Insurance?

Gap insurance, or guaranteed asset protection insurance, is an optional coverage that pays the difference between the actual cash value of your car, and the amount you owe on your loan or lease, in case of a total loss or theft. For instance, if you have a car that is worth $20,000, but you owe $25,000 on your loan, and your car is totaled in an accident, your insurance company will only pay you the actual cash value, which is $20,000. This means that you will still owe $5,000 to your lender or leasing company, which is known as the gap. Gap insurance covers this gap, so that you don’t have to pay out of pocket for the remaining balance.

Does Geico Offer Gap Insurance?

Yes, Geico offers gap insurance to its customers. According to their official website, Geico’s gap insurance coverage pays up to 25% above the actual cash value of your car, to help you cover the remaining balance on your loan or lease. This coverage is available for both new and used cars, and can be added to your existing Geico policy for an additional premium.

How Much Does Geico Gap Insurance Cost?

The cost of Geico gap insurance varies depending on various factors, such as the make and model of your car, your driving history, and the coverage limits you choose. However, on average, Geico gap insurance costs between $20 and $40 per year, which is a small price to pay for the added peace of mind.

Who Needs Gap Insurance?

Not everyone needs gap insurance, but it can be beneficial for certain types of car owners. If you have a loan or lease balance that is higher than the actual cash value of your car, or if you made a small down payment, gap insurance can protect you from financial loss. This is especially true for new and expensive cars, which can depreciate quickly in the first few years of ownership. Additionally, if you have a long loan or lease term, or if you drive a lot, gap insurance can be a wise investment.

Conclusion

Geico offers gap insurance as an optional coverage for its customers, to help them cover the gap between their outstanding loan or lease balance, and the actual cash value of their car, in case of a total loss or theft. Gap insurance can be beneficial for those who have a high loan or lease balance, a long loan or lease term, or a new and expensive car that can depreciate quickly. The cost of Geico gap insurance varies depending on several factors, but it is generally affordable and can provide added peace of mind.

FAQ