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Florida doesn’t require drivers to carry gap insurance, but the state allows lenders to require it for car loans to protect their investment in your car. Many car insurance companies also require you to buy comprehensive or collision before getting gap insurance. Comprehensive, collision and gap insurance are typically required for your car loan anyway.
Gap insurance covers the gap between what your car is worth and what you owe on your loan. Say your car gets stolen, totaled or swept away by a hurricane. If your insurance payout is less than the car is worth, you’ll be on the hook to pay back your loan. Gap insurance covers up to the full loan amount for your car regardless of your claim payout. Reasons to buy gap insurance even though it’s not required by the state:
You can expect the average $20 to $30 premium per year in Florida. By comparison, the state’s average car insurance premium is around $1,800 per year.
However, your gap coverage could go up if you live in a severe hurricane or flood zone where insurers are more likely to pay out for claims. Also, if you’re required to get comprehensive and collision for a financed car, you could pay an extra $424 per year for those.
Florida gap insurance in action. Sandy bought a car with a loan for $20,000 and added car insurance with collision, comprehensive and gap coverage. After an accident totaled her car, collision coverage paid out $15,000 for physical damage because her car was only worth $15,000 at the time of the accident.
Her gap coverage paid off the rest of her $5,000 loan. If Sandy didn’t have gap insurance, she would have had to pay the remaining $5,000 out of pocket.
While it’s difficult to say which insurer will be best for you, compare a few standout new car and gap insurance perks from some of the top Florida insurers.
You can buy gap insurance through your insurance company, a dealership or banks or credit unions. When shopping for gap insurance, consider the cost, features, benefits and convenience of your gap coverage options:
Florida gap insurance is straightforward. However, the state does include a few laws that might affect this coverage:
Although not required, you might consider gap insurance to protect your wallet and ride from Florida’s inclement weather or a total loss accident. Compare gap coverage providers to find the best option.
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