Gap insurance in Florida

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Florida may attract vacationers and beach-going residents, but it also attracts more severe accidents and weather. That combination could leave you without a car, but with a car loan to pay off. Gap insurance covers the gap between what your car is worth and what you owe on your loan.

How does gap insurance work in Florida?

Florida drivers aren’t typically required to carry gap coverage, unless it’s required by lenders.

However, drivers with a loan might need gap insurance to cover outstanding loan amounts. Say your car gets stolen, totaled or swept away by a hurricane. If your insurance claim payout is less than the car is worth, you’d still 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.

Florida allows lenders the freedom to require gap coverage to protect their investment in your car. Also, many providers require you to carry comprehensive or collision coverage before getting gap insurance, both of which are typically required by lenders.

Do I need gap insurance in Florida?

Although gap insurance isn’t required in Florida, you might opt for it anyway because and if:

  • Florida has more severe accidents. Florida has a high crash fatality rate compared to other states, which could mean a higher chance of totaling your car in an accident.
  • You still owe money on your car loan. Gap insurance is often a good idea while you’re still paying down your car loan or lease.
  • You live in a city prone to catastrophes. Many cities in Florida are set in high-risk flood or hurricane zones, which means more risk for catastrophic car damage.
  • Your car loan requires it. You may need it to fulfill your contract.

How much is gap insurance in Florida?

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 actionSandy 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.

Who has the best gap coverage in Florida?

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.

  • State Farm. Every State Farm Bank car loan includes payoff protection to cover your car if it’s totaled. And yes, that’s at no extra charge.
  • Allstate. This popular insurer’s new car replacement coverage gives you enough money after a total loss to buy a new car. You’re eligible for this coverage if your car is two years old or less.
  • Florida Credit Union. Offers loan protection for a total car loss or an option for loan payment protection if you become disabled and can’t pay.
  • Nationwide. Get the most out of your gap coverage with Nationwide’s diminishing deductible for safe drivers and new vehicle discount.
  • Esurance. Low rates and an online-based policy can mean fast, cheap and convenient gap protection.

Florida gap insurance laws

Florida gap insurance is straightforward. However, the state does include a few laws that might affect this coverage:

  • Gap coverage must be sold by a licensed insurer. You should buy gap insurance from a company licensed by the Florida Department of Financial Services.
  • No-fault laws could affect court-goers. Florida’s no-fault law limits when drivers can take a claim to court since each driver files damage under their own insurance. While no-fault rules are unlikely to influence your gap coverage, it could affect your payout amount if you go to court for a severe accident.

How do I buy gap insurance in Florida?

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:

  • Insurance company. Gap coverage through an insurer could mean cheaper premiums, but may have a deductible.
  • Dealership. A dealer’s gap insurance may have higher upfront costs, but no deductible. Some dealers also offer to pay off loan amounts on a trade-in car, but some restrictions may apply.
  • Banks and credit unions. Financial companies like banks can sell this type of policy too, and may offer low premiums or extra features if you finance a car through them.

Compare car insurance providers with gap coverage

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The AARP Auto Insurance Program from The Hartford
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Build a policy online or with local agent support, with features like better car replacement and accident forgiveness.
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Upload your current bill and get 20+ quotes from top brands for the same level of coverage.
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Enjoy having your own dedicated agent to help you get the best discounts and coverage.
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Choose from add-ons like glass repair services and new car replacement to enhance basic coverage.

Compare up to 4 providers

Bottom line

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.

Frequently asked questions about gap insurance in Florida

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