Gap Insurance in Connecticut (2025)

Gap insurance protects drivers with car loans and leases. If someone steals your vehicle or something damages it beyond repair, your insurer declares it a total loss and pays the actual cash value. This could be less than the cost to repay the vehicle loan balance or lease payoff amount.1

Connecticut drivers who don’t want to pay out of pocket in this situation should buy gap coverage, although it’s generally optional. Drivers with leases and loans longer than 60 months and people who finance brand-new cars or roll negative equity from past cars into their current loan can probably benefit from gap coverage.

How gap insurance works

Gap insurance is short for “guaranteed asset protection” insurance. Insurers offer it as an add-on to collision and comprehensive insurance policies. These pay when you damage your car in a covered incident, such as a collision or theft.2

Comprehensive and collision insurance pay to repair your vehicle. But if something severely damages your car or someone steals it and the authorities can’t recover it, the insurer only pays the car’s actual cash value. Since it’s common to owe more than your vehicle is worth, this could mean you receive less than the full amount of your outstanding auto loan balance.

Without gap insurance, you’d have to pay the remaining balance out of your pocket for a car you no longer own.

What gap insurance covers in Connecticut

Gap insurance only covers the difference between the amount an insurer pays and the amount you owe an auto lender or lease provider when a car is totaled or stolen and not recovered.

Here’s an example of how a gap insurance policy could protect against loss.

Let’s say you have an outstanding loan balance of $30,000, but your vehicle has depreciated and it’s now worth $25,000. If you total your car and have a $1,000 car insurance deductible, the insurance company would pay you $24,000, leaving you with $6,000 in out-of-pocket costs. If you have gap insurance, it will pay the $5,000 difference (minus your deductible).

Best gap insurance companies in Connecticut

Many Connecticut auto insurance companies offer affordable gap insurance. Here are some of the best insurers known for offering affordable rates and good customer service.

Travelers

Nationwide

Amica

Gap insurance vs. full coverage

Connecticut requires drivers to purchase liability insurance. This pays for losses a policyholder causes to others. The Connecticut Insurance Department also identifies other kinds of protection that are part of a full-coverage auto insurance policy, including:

Gap coverage isn’t automatically included in a full-coverage policy because drivers who don’t have a car loan or lease don’t need this protection. But anyone who could potentially owe more than their car’s value will benefit from having it so they don’t face thousands of dollars in out-of-pocket costs when an insurer won’t cover their full loan amount.

Who needs gap insurance in Connecticut?

Connecticut only requires liability insurance. While it doesn’t require gap insurance, buying this coverage has definite benefits if there’s a chance you may owe more than your car is worth at any point.

It may be especially important to buy gap insurance in the following circumstances:

• You make a down payment of less than 20% when financing a new vehicle.

• You take out an auto loan with a loan term of more than 60 months.

• The car you buy depreciates faster than a typical vehicle.

• You rolled some of your old car loan balance into your new auto loan.

• You’re leasing your car and need lease gap coverage.

A car insurance agent or auto loan lender in Connecticut can help you determine whether you need gap insurance and can help you understand all the insurance products available to you.

How to buy gap insurance in Connecticut

You can buy gap insurance from one of several different sources:

• An auto insurer that provides other coverage: Gap insurance is a common add-on to a full-coverage policy.

• An auto loan lender: Lenders also refer to this as loan forgiveness coverage.

• A stand-alone policy: Some companies provide a separate gap insurance policy that’s not part of other auto coverage, although this isn’t as common.