Does Progressive Sell Gap Insurance?
Last Updated on August 24, 2023
Progressive, like many of its competitors, sells gap insurance to cover the “gap” between the value of your car and the amount remaining on your lease or loan.
Progressive calls its gap insurance “loan/lease payoff coverage,” and it functions similarly to any other gap insurance policy.
Keep reading to find out everything you need to know about Progressive’s gap insurance and how it works.
Table of Contents:
- How Progressive’s Gap Insurance Works
- Progressive Offers Gap Insurance to Most Customers
- What Does Progressive’s Gap Insurance Cover?
- Do I Need Gap Insurance?
- Progressive Gap Insurance Requirements
- Is Gap Insurance Worth It?
- How Much Does Progressive’s Gap Insurance Cost?
How Progressive’s Gap Insurance Works
Progressive’s gap insurance, also known as loan/lease payoff coverage, works similarly to the gap insurance from other major providers.
If your car is stolen or deemed a total loss, then you might receive less from the car insurance company than what you owe. There’s a “gap” between the value of the vehicle and the amount owing on that vehicle. Without gap insurance, you must cover that gap out of pocket. With gap insurance, Progressive covers that gap.
Let’s say you buy a car for $35,000. You drive that car off the lot, and it immediately starts to depreciate in value. Three weeks later, your car is involved in a total loss accident. Progressive gives you a check for the actual cash value of the vehicle, which they determine to be $30,000. However, you still owe the dealership $35,000 for that vehicle. If you have gap insurance, then Progressive would cover this gap. Instead of getting $30,000 for the value of your vehicle, you get $35,000 to cover the value of your vehicle plus the amount remaining on your loan.
Progressive Offers Gap Insurance to Most Customers
Progressive offers gap insurance across the United States. If you’re a Progressive customer with full coverage car insurance, then you should be able to add gap insurance to your policy.
Progressive doesn’t technically call it gap insurance; instead, they call it loan/lease payoff coverage. This loan/lease payoff coverage is effectively the same as gap insurance, but it works in a slightly different way.
The main difference between Progressive’s loan/lease payoff coverage is that the “gap” is limited to no more than 25% of your vehicle’s value, although the specific limit varies from state to state.
What Does Progressive’s Gap Insurance Cover?
Progressive’s loan/lease payoff coverage covers the gap between the value of your vehicle and the amount remaining on your lease or loan.
Specifically, Progressive’s loan/lease payoff coverage covers the following:
- If your vehicle is stolen or totaled in an accident, then Progressive’s loan/lease payoff coverage (gap coverage) covers the value of the vehicle and the amount of money remaining on your lease or loan, up to 25% of the vehicle’s value
- Technically, your Progressive collision or comprehensive coverage covers the actual cash value (ACV) of your vehicle, minus your deductible, while the loan/lease payoff coverage covers the outstanding balance of your loan or lease
- If the gap between the value of your vehicle and the amount remaining on your loan is greater than 25% of the value of the vehicle, then Progressive only covers up to the 25% limit (this specific limit may vary from state to state)
- Gap insurance does not cover property damage, injuries resulting from the accident, mechanical failure, or other damage that may occur to your vehicle outside of an accident
Do I Need Gap Insurance?
No state requires gap insurance, and no insurance company requires gap insurance. However, some leasing companies, financing agencies, and dealerships may require gap insurance to protect the collateral of the loan.
In fact, some leasing companies build gap insurance into lease payments. You may already be paying for gap insurance. Check your lease paperwork or contact your leasing company to determine if you’re already paying for gap insurance. If you already carry coverage, there’s no advantage to buying additional gap insurance.
Progressive Gap Insurance Requirements
Generally, you can buy Progressive’s loan/lease payoff coverage (gap insurance) at any time. However, you must meet two broad qualifications to add gap insurance to your policy:
You Must Be Leasing or Financing a Vehicle: You can buy gap insurance for a used car or new car at any time, as long as the loan or lease has not been paid off. If the loan or lease has already been paid off, then gap insurance has no purpose, as there’s no “gap” to cover.
You Must Have Full Coverage Car Insurance with Progressive: You can only buy gap insurance if you have full coverage car insurance (including collision and comprehensive coverage) with Progressive. Many dealerships, leasing companies, and financing companies require full coverage car insurance as part of the agreement, so most leased and financed cars easily meet this requirement.
Is Gap Insurance Worth It?
You may not need gap insurance. However, it may be worth it to buy gap insurance from Progressive in certain situations, including:
- You are leasing or financing a vehicle. Some lenders require gap insurance when leasing your vehicle. If you don’t have gap insurance, then you could violate your lease.
- You made a small down payment on your vehicle. If your vehicle down payment was less than 20%, then your vehicle could be worth significantly less than the amount owing on that vehicle. You may have negative equity on the vehicle the moment you drive away from the dealership. In this situation, gap insurance may be worth it.
- You have a long financing term for your vehicle. If you financed your vehicle over an extended period, then you have a greater chance of owning more money for the vehicle than it’s worth, which means gap insurance could be worth it.
- You want peace of mind or protection against depreciation. Some cars depreciate quickly, dropping 20% or more within the first few months of ownership. Some drivers buy Progressive’s loan/lease payoff coverage for peace of mind and protection against depreciation.
You can drop Progressive’s gap insurance as soon as you need to drop it. Some drivers drop it once their lease or loan is paid off, for example, while others drop it once the gap between the value of the vehicle and the amount remaining on their loan has shrunk to a certain amount – say, under $1,000.
How Much Does Progressive’s Gap Insurance Cost?
Progressive’s loan/lease payoff coverage costs anywhere from $5 to $50 per month, depending on your vehicle type, insurance needs, and other factors.
Contact Progressive today to check how much it would cost to add loan/lease payoff coverage to your auto insurance policy.
Final Word – Progressive Gap Insurance
Progressive, like most large insurance companies, offers gap insurance. Progressive’s gap insurance is called loan/lease payoff coverage, and it covers the gap between the actual cash value of your vehicle and the amount of money you owe for your vehicle after a total loss, up to 25% of the vehicle’s value.
To learn more about Progressive’s loan/lease payoff coverage, or to buy Progressive’s gap insurance today, contact Progressive.