How To Get Gap Insurance in Florida
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Guaranteed asset protection, also known as gap insurance, is an optional type of auto insurance that Florida drivers can obtain from insurance companies, car dealerships and other financial institutions. If your car is totaled or stolen and it was worth less than what you owe on your auto loan, gap insurance can pay off the leftover amount on your loan.
See below for more information about gap insurance in Florida such as popular insurers that sell the coverage type and what laws exist surrounding Florida gap insurance.
Is Gap Insurance Required in Florida?
Florida drivers are not required by law to purchase gap insurance. However, if you are financing or leasing your vehicle, it could be required by your lender or lessor. Before you can qualify for gap insurance, you may need to buy comprehensive and collision coverage, which are also frequently required by lenders and lessors.
How Does Gap Insurance Work in Florida?
Gap insurance can provide you with a financial safety net after a car accident in case your car is worth less than the amount you still owe to your lender. If you have comprehensive and collision coverage and your vehicle is stolen or totaled, your auto insurance provider will reimburse you at the car’s actual cash value (ACV). This means your insurer will deduct money from your payout based on depreciation factors like age or wear and tear.
For example, if your car is worth $30,000 at the time of a destructive crash and you still owe $32,000 to your lender, you could receive $30,000 minus your deductible through your collision insurance and $2,000 through your gap insurance, which you could then use to pay off your loan.
Who Needs Florida Gap Insurance?
Gap insurance is most useful for new cars because of how quickly they depreciate, with a typical new vehicle losing 20% of its value within one year and 60% of its value within five years. Conversely, gap insurance is less important for used cars since they cost less up front and depreciate less quickly, meaning it is less likely that your loan balance will ever be significantly higher than the car’s ACV. In fact, some insurers may only offer gap coverage for used cars if they are less than three years old.
Florida Gap Insurance Laws
You can only purchase gap insurance in Florida from someone with a credit insurance license issued by the state Division of Insurance Agent and Agency Services. To qualify for a license, an individual must be an employee or associate of a financial institution like a bank, insurance company or car dealership.
How Much Does Gap Insurance Cost in Florida?
It will generally cost you around $20 per year to add gap insurance to your car insurance policy, although your exact premium can vary based on factors like the age of your vehicle and your claims history.
In addition, the price could be higher depending on the financial institution you go through to purchase coverage. For example, Suncoast Credit Union offers members gap insurance lasting up to seven years for a one-time payment of $425.
Companies That Offer Gap Insurance in Florida
Some of the major auto insurance companies that operate in Florida and sell gap insurance include the following:
- American Family Insurance
- The Hartford
- Liberty Mutual
You may also be able to obtain gap insurance through your dealer or lender. While gap coverage from these sources is often more expensive, it may cover your comprehensive or collision deductible, which usually won’t be covered by gap insurance from a traditional insurer. In addition, some lenders sell gap waivers, meaning the lender will cancel any debt on your loan that exceeds the insurance payout after your car is lost or destroyed.
How Do I Get Gap Insurance in Florida?
You should try to get quotes from around three to five separate insurance providers so you can compare rates to find the best gap coverage for your budget. Insurers will need to see information like your date of birth, the make and model of your vehicle, how old your car is, your driving record, your driver’s license number and more.
While it could be tedious to contact multiple insurance carriers individually to give them this information, you can fortunately streamline the process by taking advantage of SmartFinancial’s online insurance marketplace. If you input your zip code below, it will take you to a questionnaire where you can tell us about your coverage needs and provide the information listed above. From there, we can get you in touch with insurance agents in your region who can provide you with free auto insurance quotes.