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Texas Car GAP Insurance

Car GAP (Guaranteed Auto Protection) insurance is not required in Texas but it is a good idea to protect yourself with a Texas Car GAP insurance policy after buying or leasing a new car in case it is stolen or totaled.  Auto GAP Insurance in Texas is not something you will need forever, just the first few years that you own your new car.  Why is GAP insurance so important in TX? 

How Texas Car GAP Insurance Saves You Money

When you purchase a new car and drive it off the dealer lot, it automatically depreciates 20%.  If you have put less than 20% down on your new car, you are good candidate for Texas car GAP insurance.  Even if you have put 20% down you may want to consider Texas auto GAP insurance because part of that payment each month goes toward the interest of your loan.  The purpose of car Gap insurance is to provide coverage for the actual cash value of your car, which is a lot different that what you still own on your loan.

A worst case scenario would be driving a brand new car off the dealer lot and having it totaled within ten minutes by a careless driver.  Your standard Texas car insurance policy is only going to pay what the car is worth, and since it depreciated 20% upon driving it off the lot, there is a huge difference between what your car is worth, and what you owe on it.

You don’t want to spend the next several years making payments on something you can’t drive.  Texas car GAP insurance will take care of that difference saving your pocket book.

To help save some money on your Texas car GAP insurance you will want to make sure that you review your policy and what you own on the car each year to keep the premium down.  You don’t want to carry $18,000 of additional insurance when you only need $15,000.  The average Texas car GAP insurance premium is around $100 a month or 4% to 5% of the vehicles sticker price for the year.

How A Texas GAP Auto Insurance Policy Works

Standard Texas comprehensive and collision polices only cover your new car’s fair market value and since your car just depreciated 20% from driving it off the dealer lot, your car is only insured for 80% of what you just paid for it.  This means you could end up paying off a loan for a totaled car you can’t drive.

How Texas Auto GAP Insurance Helps Leased And Stolen Vehicles

That is how Texas car GAP insurance helps.  It will pay the difference between what you owe on your car and what your insurance policy says its worth.  In the case of a leased car, the leasing company will probably require it.

Texas car gap insurance also covers your car if it is stolen.  Thieves like new cars and target specific models of cars (in Texas, it’s actually Chevy pick up trucks) which also turns out to be the most popular models sold.

If your car is stolen your coverage is the same as if you were in an at-fault accident.  Comprehensive insurance will cover the value of the car but not the loan that you have on it through your bank.

Additional Things You Need To Know About Your Texas GAP Car Insurance When Leasing

  1. Your GAP auto insurance policy may not be honored if you do not have collision and comprehensive auto insurance.  Lease agreements usually require you to carry these at all times.
  2. You must be in compliance with the terms of your lease.
  3. Even though most people purchase GAP car insurance when a lease is started, some Texas car insurance companies will sell you a GAP policy at any time during your leasing period.

Texas Car Insurance Companies That Provide GAP Insurance

Here is a partial listing of some of the top Texas auto insurance companies that offer GAP auto insurance in TX:

  • American General Indemnity Company
  • American National Property & Casualty Co.
  • Balboa Insurance Company
  • First Colonial Insurance Company
  • Old United Casualty Company
  • Security Insurance Company of Hartford
  • United Financial Casualty Company
  • Universal Underwriters Insurance Company
  • Landcar Casualty Company
  • Lyndon Property Insurance Company
  • Stonebridge Casualty Insurance Company 

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