Best Gap Insurance in Texas for 2024 (Check Out the Top 10 Companies)

The best GAP insurance in Texas covers the gap between your loan and your car’s value after a total loss, with cheapest offer being $55 by State Farm.

How much does GAP insurance cost in the state of Texas? Through the dealership, Texas GAP insurance costs are usually five percent of the loan that you used to finance or lease your vehicle. For more information, read our “Best Car Insurance for a Leased Vehicle.”

However, you can pay only a few dollars per month by purchasing your Texas GAP insurance through an auto insurance company. Keep reading to learn the best GAP insurance companies in Texas and how to best protect yourself with automobile GAP insurance.

Ready to get started? Immediately compare Texas GAP insurance quotes right now by entering your ZIP code into our free quote comparison tool above.

#1 — State Farm: Top Overall Pick

Pros

• Bundling Discount: Offers a 17% bundling discount, making it a cost-effective choice when considering the best gap insurance in Texas.
• Overall Value: Ranked #1 for overall value, which means you get comprehensive coverage at competitive rates for the best gap insurance in Texas. Discover more when you read our article “State Farm Reviews.”
• A.M. Best Rating: Despite a B rating, State Farm is highly trusted for its consistent service and reliability in Texas.

Cons

• Lower A.M. Best Rating: The B rating may be a concern if you prioritize financial stability, which could impact your decision for the best gap insurance in Texas.
• Limited Flexibility: State Farm’s plans might not offer the flexibility that some customers need, making it less ideal for those seeking customizable options.

#2 — Progressive: Best for Flexible Plans

Pros

• Flexible Plans: Known for offering flexible plans, making it easier to find the best gap insurance in Texas that fits your needs.
• Bundling Discount: Provides a 12% bundling discount, allowing you to save on multiple policies including the best gap insurance in Texas. Learn more about bundling discounts at “Progressive Insurance Review.”
• High A.M. Best Rating: With an A+ rating, Progressive is financially strong, which adds peace of mind when choosing gap insurance in Texas.

Cons

• Lower Bundling Discount: The 12% discount is lower compared to other providers, which might not maximize savings for those looking for the best gap insurance in Texas.
• Complex Pricing: The flexibility in plans might lead to complex pricing structures, making it harder to understand the cost of the best gap insurance in Texas.

#3 — Nationwide: Best for Bundling Options

Pros

• Bundling Options: Offers a 20% bundling discount, providing significant savings when purchasing the best gap insurance in Texas along with other policies. Read more at “Nationwide Reviews.”
• High A.M. Best Rating: With an A+ rating, Nationwide ensures financial stability, which is crucial for those seeking reliable gap insurance in Texas.
• Ranked #3: Nationwide’s high rank reflects its strong overall performance, making it a solid choice for the best gap insurance in Texas.

Cons

• Limited Coverage: Some customers might find the coverage options limited, which could affect the suitability of the best gap insurance in Texas.
• Premium Costs: Despite the bundling discount, premium costs might still be high for certain plans, affecting the affordability of gap insurance in Texas.

#4 — Liberty Mutual: Best for Young Drivers

Pros

• Young Drivers: Ranked #4, Liberty Mutual is particularly beneficial for young drivers looking for the best gap insurance in Texas.
• Bundling Discount: With a 30% discount, Liberty Mutual offers one of the highest bundling discounts, making it an excellent option for gap insurance in Texas.
• A.M. Best Rating: The A rating indicates strong financial health, which is important when choosing the best gap insurance in Texas.

Cons

• Premium Rates: Premium rates may be higher for young drivers, which could increase the cost of the best gap insurance in Texas.
• Customer Service: Some customers report inconsistent customer service, which might be a drawback when dealing with gap insurance in Texas. Learn more about customer services at “Liberty Mutual Insurance Review.”

#5 — Erie: Best for Value Coverage

Pros

• Value Coverage: Erie offers exceptional value coverage, making it an excellent choice for the best gap insurance in Texas, especially with its 25% bundling discount. Read more about value coverage at “Erie Insurance.”
• High A.M. Best Rating: The A+ rating assures strong financial stability, providing confidence when selecting gap insurance in Texas.
• Ranked #5: Erie’s high rank signifies its commitment to value and quality, making it a top contender for the best gap insurance in Texas.

Cons

• Limited Availability: Erie may not be available in all areas of Texas, which could limit access to the best gap insurance in Texas.
• Niche Focus: Erie’s focus on value coverage might not appeal to those looking for more specialized or extensive gap insurance options in Texas.

#6 — The Hartford: Best for Senior Drivers

Pros

• Senior Drivers: The Hartford is highly recommended for senior drivers, providing tailored coverage options for the best gap insurance in Texas.
• High A.M. Best Rating: With an A+ rating, The Hartford offers reliable financial strength, making it a trustworthy choice for gap insurance in Texas.
• Bundling Discount: Offers a 10% discount, which can lead to savings when combining policies, including gap insurance in Texas.

Cons

• Limited Discount: The 10% bundling discount is lower than other providers, which might not maximize savings for the best gap insurance in Texas. Discover more when you read our article entitled “The Hartford .”
• Senior Focus: While great for seniors, The Hartford’s focus might not cater to younger drivers seeking gap insurance in Texas.

#7 — Amica: Best for Customer Service

Pros

• Customer Service: Known for top-tier customer service, Amica is a great option for those seeking the best gap insurance in Texas with reliable support.
• Bundling Discount: A 15% discount on bundling policies makes Amica an attractive choice for gap insurance in Texas.
• High A.M. Best Rating: The A+ rating ensures financial stability, making Amica a solid choice for gap insurance in Texas.

Cons

• Higher Premiums: Amica’s premium rates might be higher, which could make the best gap insurance in Texas more costly.
• Limited Discounts: Other discounts besides bundling may be limited, which might not provide the most savings for gap insurance in Texas. Learn more about limited discounts at “Amica Auto Insurance Review.”

#8 — Travelers: Best for Replacement Cost

Pros

• Replacement Cost: Travelers excels in offering replacement cost coverage, making it a top choice for the best gap insurance in Texas.
• High A.M. Best Rating: The A++ rating reflects Travelers’ superior financial stability, ensuring peace of mind for gap insurance in Texas.
• Bundling Discount: A 13% bundling discount provides moderate savings when combining policies, including gap insurance in Texas.

Cons

• Complex Claims Process: Some customers find the claims process complex, which could be a drawback when dealing with gap insurance in Texas. Learn more at “Travelers Insurance.”
• Higher Premiums: Travelers’ comprehensive coverage might come with higher premiums, affecting the affordability of the best gap insurance in Texas.

#9— Allstate: Best for Claim Satisfaction

Pros

• Claim Satisfaction: Allstate ranks highly for claim satisfaction, making it a strong contender for the best gap insurance in Texas.
• Bundling Discount: Offers a 10% discount on bundling, which can help reduce costs for gap insurance in Texas.
• High A.M. Best Rating: With an A+ rating, Allstate provides reliable financial strength for those seeking gap insurance in Texas.

Cons

• Higher Rates: Allstate’s premium rates might be higher, which could make the best gap insurance in Texas more expensive.
• Discount Limitations: The 10% bundling discount might not be as competitive compared to other providers, affecting the overall savings on gap insurance in Texas. Read more at “Allstate Reviews.”

#10 — Farmers: Best for Customer Support

Pros

• Customer Support: Farmers is known for excellent customer support, making it a good choice for the best gap insurance in Texas.
• Bundling Discount: Offers a 15% discount, providing significant savings when bundling policies, including gap insurance in Texas. Discover more bundling discount at “Farmers Insurance Group Review.”
• A.M. Best Rating: The A rating indicates solid financial strength, ensuring reliability for gap insurance in Texas.

Cons

• Premium Costs: Farmers’ premium costs may be higher, which could affect the affordability of the best gap insurance in Texas.
• Limited Flexibility: The policy options might lack the flexibility that some customers need, impacting the suitability of gap insurance in Texas.

Average Texas GAP Insurance Coverages and Rates

What is GAP insurance in Texas? GAP insurance pays the difference between the cash value of your financed car and the remaining balance you owe on your auto loan, protecting your finances after a total loss accident.

How could you owe more than what your car is worth? Do you really need GAP insurance for your new car?

Imagine you finance a brand new vehicle. Cars depreciate by more than 10 percent of their value within the first month of ownership. So now you owe more on your auto loan than what your new vehicle is currently worth.

Now imagine you total that new car. Your best car insurance companies sends you a check for the actual cash value of your car, but it is not enough to pay for the remaining balance on your loan. GAP will cover that difference.

Without GAP insurance, you must pay for that amount out of pocket. Where can you go to purchase GAP insurance? There are two major ways to invest in this type of protection.

You can get GAP insurance from either the dealership or an auto insurance company. Some stand-alone companies also exist. Take a look at the table below to see some estimates of how much GAP insurance in Texas might cost you from a dealership.

As you can see from the data above, the more expensive the manufacturer’s suggested retail price or MSRP of your vehicle, the higher your GAP rate will be if you choose to purchase it through a car dealership.

According to Kelley Blue Book, the MSRP is the price set by the car manufacturer and includes destination charges and the minimum required equipment. Now you have a clearer idea of how car dealerships calculate GAP insurance rates using your vehicle’s MSRP.

While GAP coverage from a dealership will cost hundreds of dollars annually, GAP coverage from an insurance company can have an average cost that is as little as $20 per year.

Our expert recommendation is to buy Texas GAP insurance through an auto insurance carrier. Every insurer offers a slightly different GAP policy. For example, State Farm offers actual auto loans which include a GAP insurance policy, known as Payoff Protector. AAA Texas GAP insurance is different.

Best Texas Auto Insurance Companies for GAP Insurance

Are you wondering where to buy GAP insurance in Texas? Before making a decision, consider how much car insurance you need, as this can affect your overall coverage. Remember, you do not have to purchase GAP insurance from the dealership.

Most of the top auto insurance companies in Texas will likely carry GAP insurance policies. However, you may have a harder time finding small auto insurance companies with GAP insurance. Currently, there is no GEICO GAP insurance being offered.

Depending on what company you use, adding GAP coverage should only tack on an extra $60 or less annually to your auto insurance rates through an insurance provider.

How much will auto insurance from major companies in Texas cost you? Many variables go into calculating your individual rates. Your age, ZIP code, driving record, and credit history can all impact what you pay each month.

To simplify things, we gathered the average annual rates of auto insurance from different companies in Texas. Take a look at the table below for more details.

USAA auto insurance is the cheapest insurance company in Texas. However, only active or retired military personnel and their families are eligible to use services from USAA. State Farm and GEICO offer the next cheapest average rates.

 

Do Allstate, Nationwide, and Progressive have GAP insurance? Yes, all three insurers are GAP insurance companies but have different requirements. For example, to qualify for Progressive GAP insurance, you must also purchase comprehensive and collision coverage auto insurance.

Whatever company you use, make sure you review the different types of car insurance coverage to ensure you’re fully covered, and specifically add GAP insurance to your policy so you know without a doubt that you and your financed vehicle are properly protected.

Discover if GAP insurance is required in Texas

Car insurance requirements vary by state. According to Texas insurance law, a driver is required to carry minimum liability insurance with coverage limits of at least $2,500 for bodily injury of one person per accident, $5,000 for bodily injury of multiple people per accident, and $2,083 for property damage per accident.

That being said, we can’t understate the importance of having liability insurance. As we mentioned above, liability insurance coverage pays for physical injuries and physical damage that you may have caused in accidents.

The annual cost of auto insurance coverage is worth protecting yourself from unforeseen issues down the road. Not having this coverage in place could mean you might have to shell out a lot of money if you’re found at fault in an accident in which people were hurt, or property was damaged.

Collision and comprehensive insurance products are also not required by Texas’s minimum standards. Collision pays for property damage regardless of who’s at fault, while comprehensive coverage pays for damage that doesn’t involve a collision, like a falling object, flood, or vehicle theft.

Comprehensive coverage could also cover a total loss accident, but it depends on the company. That being said, only GAP insurance will help cover an auto loan that remains after a vehicle has been totaled.

You may hear the term full coverage be used. This refers to collision and comprehensive coverage that’s added to a liability policy. GAP can also be included from auto insurance companies that offer it.

Your car insurance rates will likely increase after an at-fault accident, but you can find your cheapest coverage option by using our free quote comparison tool below today.

Case Studies: Best Texas GAP Insurance Coverage

Case Study 1: Sarah’s Total Vehicle Loss

Sarah recently purchased a new car and financed it with an auto loan. She opted to buy GAP insurance from the dealership when she bought the car. Unfortunately, just a few months later, she got into a severe accident that resulted in a total loss of her vehicle.

Since Sarah had GAP insurance, she was relieved to find out that the insurance covered the difference between the actual cash value of her totaled car and the remaining balance on her auto loan.

Without GAP insurance, Sarah would have been responsible for paying off the remaining loan amount out of pocket. The GAP insurance provided her with financial protection and saved her from a significant financial burden.

Case Study 2: John’s Affordable GAP Coverage

John purchased a used car and decided to shop around for the best GAP insurance coverage. He knew that dealership-sold GAP insurance could be expensive, so he looked for more affordable options.

After researching various insurance companies, John found an auto insurance provider that offered GAP coverage at a much lower cost.

By purchasing his GAP insurance from the auto insurance company, John was able to save money while still ensuring that he had the necessary coverage in case of a total loss. He felt confident that his financial investment in the car was protected.

Texas GAP Insurance is Worth it

Often when it comes to insurance coverage options, you never know if you’re going to need it. However, investing in the right amount of Texas GAP insurance coverage for your vehicle is an easy and affordable way to prevent yourself from facing serious financial hardship.

You now know every detail about how GAP insurance works in Texas. If you get into an accident and your new car is totaled, Texas GAP insurance will cover the difference between what you owe on your car loan and the actual cash value of your vehicle.

Enter your Texas ZIP code into our free quote comparison tool below to find the right GAP coverage for you and your needs.

If you drive a newer car, and if it is early on in the life of your auto loan, there is more likely to be a bigger deficit between what your car is worth and what you still owe. If you total your car, getting a GAP insurance refund will save you from paying for that deficit out of pocket.