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Progressive Gap Insurance

Progressive’s loan/lease payoff coverage helps pays out your existing car loan after an accident, limiting it to no more than 25% of your vehicle’s value.

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  • Progressive gap insurance is known as loan/lease payoff coverage.
  • Gap insurance covers the difference between your insurance payout after a total loss and how much you still owe on the car.
  • Along with looking at Progressive gap insurance, we’d recommend considering the similar option available through State Farm.

While there’s no such thing as Progressive gap insurance, policyholders have a similar option to protect their new or leased vehicles. In this article, we’ll explain everything you need to know about Progressive’s loan/lease payoff coverage, including how it works and how much it costs. We’ll also compare it against the best car insurance and cheapest car insurance providers to determine which one will provide the best gap coverage for your vehicle.

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Progressive Gap Coverage

Those searching for Progressive gap insurance may notice that it goes by a different name: loan/lease payoff. That’s because the company has a slightly different policy in place than the typical gap insurance offered by other providers.

Gap Insurance vs. Loan/Lease Payoff Coverage

Loan/lease payoff coverage is pretty similar to gap insurance except that it limits the amount of money you’ll receive to 25% of the car’s value. In other words, you’ll receive a smaller percent of your vehicle’s original value with loan/lease payoff, though it’s still far greater than the car’s actual cash value (ACV) after an accident.

Gap insurance must usually be purchased near the beginning of your ownership period. On the other hand, loan/lease payoff can be purchased at most points in a car’s lifetime. Used cars also struggle to qualify for most companies’ gap coverage options, which is one reason that drivers may turn to Progressive gap insurance.

How Does Gap Insurance Work?

Gap insurance and loan/lease payoff coverage both help protect you from depreciation. Once you buy a car, its value immediately starts to decrease. And if you finance or lease a vehicle, depreciation can leave a gap between what you owe and the car’s actual value.

Suppose you’ve financed a new car for $25,000 and have been making all your payments for several years. It’s now worth only $15,000, but you owe $20,000 on your loan, representing a $5,000 gap. If your vehicle is totaled, Progressive will pay you no more than 25% of your car’s value, equating to a maximum amount of $3,750.

How to Add Gap Insurance to Progressive

There are three different ways that you can add Progressive loan/lease payoff coverage to your policy. The first is by signing up for gap coverage online through the Progressive portal. You also have the option of calling a licensed representative at 1-866-749-7436 or being connected with a licensed independent agent near you.

How Much Is Progressive Gap Insurance?

Gap insurance is typically pretty affordable, though exact rates will be determined by factors such as your driving history, age, and car model. Expect to spend an average of $20 per year to add a Progressive gap insurance policy to your existing coverage.

As with most plans, it’s helpful to bundle your Progressive gap insurance with homeowners insurance, renters coverage, and life insurance. That way, you could get cheap auto insurance along with lower rates on your combined coverage types.

Where to Purchase Gap Coverage

Motorists can also purchase gap insurance coverage from the dealership where they bought their car. It’s almost always cheaper to get gap insurance directly from a car insurance provider, however, even if the dealership bundles the policy with your car payment.

Buying gap insurance from a dealership may complicate matters if you plan to drop coverage at some point. Most major auto insurance providers are more flexible in letting you cancel your gap coverage. Keeping this in mind, we’d recommend picking Progressive gap insurance over a policy from a car dealership.

Is Progressive Gap Insurance Worth It?

Whether or not you need Progressive gap insurance for your car depends on multiple factors. It’s usually a smart choice for new vehicles or leased cars, though, and policies are relatively inexpensive. Below, we’ll outline a few situations when gap insurance might be the right choice.

  • You have a leased car: Most lenders require customers to get gap insurance for vehicles gotten via lease. Gap insurance is typically an add-on to your comprehensive coverage or collision coverage, though the policies aren’t always bundled.
  • Your car has long-term financing: If you’ve taken out long-term financing on your car, you may need to buy gap insurance. A longer loan term means that you could eventually end up owing more to the financing company than the car’s ACV.
  • Your car will quickly depreciate: Some car models depreciate quicker than other ones. Do your due diligence on the specific car model you own to make sure that you’re adequately protected against depreciation.
  • You have a low down payment: For customers who buy their car with a down payment of under 20%, it makes sense to purchase gap insurance. Such low down payments will usually result in negative equity on the car as soon as it’s taken off the lot.

While Progressive gap insurance comes through the form of loan/lease payoff coverage, you’ll receive similar benefits. Those who need gap insurance will typically be able to pick up protection using Progressive’s option.

Gap Insurance Progressive: Conclusion

If you have taken out a car loan or are financing your vehicle, purchasing loan/lease payoff coverage through Progressive can help provide peace of mind for a few dollars every month. The provider’s loan/lease payoff coverage will help pay up to 25% of your vehicle’s value if it is totaled in an accident. However, we still recommend shopping around with other providers, as they may offer further compensation with their gap coverage.

Progressive Gap Insurance Alternatives

Progressive gap insurance could work well for some drivers, but others may prefer different options. Make sure to also consider State Farm’s auto insurance coverage as an alternative to Progressive gap insurance.

Whether you’re just looking at Progressive insurance for gap coverage or are considering a full coverage policy, it’s smart to compare multiple car insurance quotes. That way, you’ll be able to find cost-effective car insurance coverage that suits your needs.

Compare Car Insurance Rates

Enter your zip code and answer a few simple questions to find the best rates in your area.

State Farm: Best Overall

Those who receive an auto loan from State Farm itself gain access to the company’s free Payoff Protector service. This program, which closely mirrors gap insurance, will cancel the difference between your vehicle’s ACV and the principal car loan balance. Note that your vehicle must be insured by State Farm and your loan must be from the company to qualify.

State Farm has a strong reputation across the industry for its wide range of local agents and competitive premiums. The company is especially compelling for young drivers due to its many discount opportunities for this high-risk group.

Keep reading: State Farm car insurance review

Progressive: Best for High-Risk Drivers

Progressive gap insurance, as mentioned above, is known as loan/lease payoff coverage and costs around $20 per year. Due to its excellent coverage, it’s a strong choice for those who want to protect their investment in a leased, used or new car.

Progressive is known to insure high-risk drivers who’d be rejected elsewhere for poor credit scores, bad driving records and speeding tickets. Note that loan/lease payoff coverage pays out 25% or less of your car’s original value, while gap insurance reimburses drivers far more.

Keep reading: Progressive car insurance review

Gap Insurance With Progressive: FAQ

Below are frequently asked questions about gap insurance with Progressive.

Does gap insurance cover a blown engine?

No, gap insurance coverage does not cover engine failure. It only pays for the difference that you owe on your vehicle after a car accident leads to a total loss. Gap insurance is an optional coverage plan, so it won’t be included by default with all auto insurance policies.

What is the maximum amount that gap insurance can pay?

In general, gap insurance covers the full difference between your car’s initial value and the car loan amount that’s left. You’ll likely have to pay a deductible before this aspect of your car insurance policy comes into play, however. Loan/lease payoff coverage, which is what you’ll get through Progressive gap insurance, has a payout limit of 25% of your car’s initial value.

Is gap insurance worth it after two years?

After two years, gap insurance makes sense if you’re underwater on your car loan. Those who have closed the gap between the value of their car and the amount owed likely won’t need gap insurance since they’ve made plenty of loan payments already.

Our Methodology

Our expert review team takes satisfaction in providing accurate and unbiased information. We identified the following rating categories based on consumer survey data and conducted extensive research to formulate rankings of the best car insurance providers.

  • Affordability: A variety of factors influence cost, so it can be difficult to compare quotes between providers. Our team considers auto insurance rate estimates generated by Quadrant Information Services and discount opportunities when giving this score.
  • Coverage: Because each consumer has unique needs, it’s essential that a car insurance company offers an array of coverage options. We take into account types of insurance available, maximum coverage limits, and add-on policies.
  • Industry Standing: Our team considers Better Business Bureau (BBB) ratings, financial strength, and years in business when giving this score.
  • Availability: Auto insurers with greater state availability and few eligibility requirements are more likely to meet consumer needs.
  • Customer Service: Reputable car insurance providers operate with a certain degree of care for consumers. We consider complaints filed with the National Association of Insurance Commissioners (NAIC), J.D. Power claims servicing scores, and customer feedback.
  • Online Experience: Insurers with easy-to-use websites and highly rated mobile apps scored best in this category.