Does Nationwide Have Gap Insurance?
Nationwide’s gap insurance can protect you from owing money on a vehicle that’s a total loss—but do you really need it?
Written by Amber Reed
Reviewed by Pat Roache
Nationwide offers
gap insurance
for leased or financed vehicles that are six years old or newer. If your car is totaled and the balance of your loan is higher than your car’s depreciated value, Nationwide’s gap insurance will cover the difference. “Mind the gap” is not only good advice when you’re riding The Tube abroad—it’s also good advice when it comes to your
car loan
! This type of car insurance
might not be something you’re familiar with, but it’s certainly something you should learn about if you’re buying a new car. Read on to learn all about just what gap insurance is and what Nationwide’s policy has to offer. Does Nationwide have gap insurance?
Yes, Nationwide offers gap insurance.
Gap insurance stands for Guaranteed Asset Protection. If your car is stolen or totaled when you owe more on your loan than the car is worth, this policy makes up the difference between your car’s
actual cash value (ACV)
and the amount left on your lease or loan.A downside of new cars is that they lose value with breathtaking speed, and it’s not uncommon for there to be a period when you owe more on a new car than it’s actually worth. If your
financed car is totaled
in an accident or car theft during this time, your collision
or comprehensive coverage
will only pay for the car’s actual cash value. That means you could end up still owing money for a car that you no longer have without gap insurance to cover the difference.
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How does Nationwide’s gap insurance work?
You can add on gap insurance with Nationwide as part of a
full coverage policy
. Since gap insurance covers the difference between your loan balance and your comprehensive and/or collision policies, you wouldn’t want to get gap insurance if you didn’t have those policies. We should mention that Nationwide doesn’t sell policies in Alaska, Alabama, or Hawaii. So if you live in one of those states, you’ll have to look to another company for coverage.
Here’s how Nationwide’s gap insurance works:
- Let’s say you’ve purchased a newBMWfor $60,000. You make a 10% down payment and then finance the remaining $54,000 purchase price. And to protect your investment, you add gap insurance to your full-coverage policy from Nationwide.
- Only a few months later, someone runs a red light and your beautiful Bimmer is totaled.BMW depreciation ratesare some of the steepest on the market, and it's lost about 20% of its value—so your car only has an ACV of $48,000 at the time it’s totaled.
- You file a car insurance claim for your totaled car, pay your $1,000 deductible, and get a payout of $47,000. However, this still leaves you around $7,000 short of paying off your loan.
- But never fear! You can submit a claim through your gap insurance, and the remaining $7000 of your loan balance is paid.
This coverage is only available for vehicles that are six years old or less, and it only covers total losses—mechanical failure doesn’t qualify. It also won’t pay for
car repairs
or give you any money for a new car, but it will keep you from being financially upside down for a car that no longer exists.If you’re new to Nationwide, then you can easily get a quote by contacting an agent or getting an
insurance quote online
. If you already have Nationwide, then you can contact your agent, or possibly add it through their app or online account. Should you buy gap insurance from the dealership or your insurance company?
If you’re
financing a car in-house with a dealership
, then you’ll likely be offered gap insurance as part of your loan. It might even be automatically included, so make sure you read the fine print of your financing agreement. In some cases, your lender might require you to have gap insurance, but you can choose to buy gap insurance from your dealer or insurance company
.It typically ends up being more expensive to get your gap insurance through your lender. Why? Your lender will add the entire cost of the gap insurance policy (usually between $400 and $700) onto your loan amount. That leaves it subject to interest, which means you’ll end up paying more than the actual purchase price of the policy.
But you can get gap insurance for a relatively small addition to your premium if you go through your insurance provider. The average annual cost to add gap insurance to a preexisting policy is between $20 and $60 per year and you won’t have to pay any interest.
Is gap insurance worth it?
Generally speaking, gap insurance is a good investment if you’re financing a new car. The coverage itself isn’t too expensive, and it can protect you from thousands of dollars in out-of-pocket costs—and the bitter experience of having to pay off a totaled car.
The terms of your financing agreement also have a big impact on whether or not gap insurance is a smart move. If you have a longer loan term, a high interest rate, or didn’t make a very large down payment, gap insurance is a smart investment. And depending on the terms of your lease or loan, it might even be required!
How to find the best gap insurance
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