What car insurance companies offer GAP insurance in Texas?

GAP insurance in Texas is not legally required, but there are plenty of companies that offer GAP coverage if it’s something you are thinking of purchasing. GAP insurance in Texas will cover the difference between the amount you owe on your car loan and how much your car is actually worth. If you are considering purchasing GAP insurance, you can do so directly through your car dealership or with certain insurance companies. Be sure to compare rates for GAP coverage to find the cheapest rates in Texas.

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Chris Tepedino is a feature writer that has written extensively about home, life, and car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and C...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Dec 16, 2021

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The Rundown

  • Texas does not require GAP coverage on financed vehicles
  • Dealerships can charge an additional five percent of the loan amount for GAP insurance
  • GAP insurance covers the difference between the loan you have on your car and your car’s actual worth

Car insurance can be a bit confusing. If you are driving a newer car, or if you store your car in outdoor spaces, you may be curious whether GAP coverage is something you should look into.

In the state of Texas, GAP coverage is not a requirement. In fact, the state has made it illegal for financing companies to require individuals to purchase GAP insurance if they finance new vehicles.

Still, there are a lot of car insurance companies that offer GAP coverage in Texas. If you live in Texas and are looking for GAP insurance on your vehicle, you can compare quotes online to see how much it will cost.

Because GAP insurance in Texas is relatively easy to find, you should compare free insurance quotes online to see whether it would make a significant price difference on a policy. If you already have car insurance, you can look into whether the company you’ve purchased a policy with offers GAP insurance in Texas. You should be able to find affordable GAP insurance in Texas without much of a hassle.

As you look for GAP insurance rates in Texas, be sure to use a quote tool that compares quotes from multiple companies at once to give you a good idea of which company would offer you the cheapest rates. In fact, you can use our free tool above to compare GAP insurance quotes in Texas today.

Which companies offer GAP insurance in Texas?

If you are financing a new car, you can choose to purchase stand-alone GAP insurance in Texas through a Texas dealership. Legally, a dealership cannot charge more than five percent of your car loan in GAP coverage.

Still, most dealerships will charge a lot more for GAP coverage than an insurance company, so it’s wise to compare car insurance quotes and see if you can find anything more reasonable. Purchasing GAP insurance through an insurance company is simple to do, and you’ll likely save some money when you do so. Some of the GAP insurance companies in Texas include:

  • Balboa
  • Markel
  • AAA
  • Transamerica
  • Allstate
  • Safe Auto
  • Ohio Indemnity
  • First Colonial
  • Landcar Casualty
  • Old United
  • Securian
  • Virginia Surety
  • United
  • Spinnaker

There are other insurance companies that are authorized to offer GAP coverage, so you should still do some online research to compare quotes in order to find your best and cheapest deal.

If you know there’s a company you’d like to use when purchasing GAP insurance, you can call and speak to an agent with that company to see what the rates would be.

For example, if you are interested in learning more about Texas GAP insurance with Progressive, you can call and speak to a Progressive agent to see if it’s an option and how much you can expect to pay. Unfortunately, there is no Texas GAP insurance phone number you can call to quickly and easily purchase coverage, but since you can compare car insurance companies that offer GAP coverage in Texas, you should still be able to get a good deal.

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What does GAP insurance cover?

If you purchase GAP insurance, your GAP coverage will pay off the loan you have on your car if your car is totaled, severely damaged, or stolen. GAP insurance is only available to original loan holders on a vehicle. Once the car title changes hands, GAP coverage is no longer an option.

While you cannot be required to carry GAP coverage, you will be required to carry full car insurance coverage—which includes both collision and comprehensive car insurance—if you are leasing or financing a new car. GAP coverage is similar to collision and comprehensive coverage in that it offers you additional help if something outside of your control were to happen to your vehicle. GAP insurance will help you if your car is totaled or stolen and you are upside down in your loan, meaning you owe more on the car than the car is actually worth.

How does GAP insurance work?

Because new cars depreciate in value so rapidly, GAP coverage offers peace of mind once you drive your car off the lot and until the loan on your car is less than your car’s total value. For example, if you purchase a car for $23,000 and you drive it for a few weeks, your car’s value will have automatically decreased.

If your car is now worth only $20,000 and you get in a car accident, you will be responsible for paying the additional $3,000 out of your own pocket. But with GAP coverage, your insurance would cover the $3,000.

Do I need GAP insurance on my car?

The answer to whether you need GAP insurance on your vehicle depends on a few factors. You may want to consider GAP insurance on your car in the following situations:

  • If the down payment you initially made on your vehicle was less than 20%
  • If the loan for your vehicle is 60 months or more
  • If you are leasing a vehicle and your contract dictates that you carry GAP coverage

While Texas has outlawed the requirement for GAP insurance, there are some companies that have loopholes to get around certain laws, so make sure you understand any loan or lease contract before you sign it. If you decide that GAP insurance would work in your favor, you should shop around online to compare prices and see how much GAP coverage would add to your monthly car insurance rates.

You can use our free tool below to find and compare car insurance quotes from multiple Texas companies that offer GAP insurance at once.

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