Gap Insurance in Virginia (2025)

When you drive a vehicle off the lot, it immediately starts to depreciate in value. No one enjoys watching their vehicle’s value decline, and this creates a significant financial risk for drivers who financed or leased their vehicles. Suddenly, you may owe more on the vehicle than it’s worth, and if you’re in an accident, you may be left with a bill and no vehicle.

Gap insurance mitigates this risk of financial loss after an accident for drivers with a financed vehicle. Full-coverage car insurance in Virginia costs an average of $180 per month. Adding gap coverage to your policy typically costs $2 more per month. If you plan to finance or lease a vehicle, gap insurance might be a useful addition to your car insurance policy.

How gap insurance works

A new car loses value quickly. As a general rule, a new vehicle will lose approximately 20% of its value in the first year. Within five years on the road, new vehicles lose around 60% of their original value.1

Even if you purchase full-coverage car insurance, which your lender will likely require, that policy only covers the current market value of the vehicle.2 But your outstanding loan balance, based on the vehicle’s initial value, may be higher than the car’s current value. The mismatch of numbers leads to a gap in your car insurance coverage.

What gap insurance covers in Virginia

Gap insurance covers the difference between the vehicle’s current market value and your outstanding loan amount. After an accident, you’ll be able to pay off the remaining loan balance with the help of your gap insurance policy.

For example, let’s say you get into an accident that totals your vehicle. And your full-coverage policy will pay up to the current market value of $15,000. But your outstanding loan balance is $20,000. You’ll still be responsible for $5,000 unless you carry gap insurance.

In Virginia, the lender or dealer may offer gap insurance to drivers who finance or lease their vehicles.3 But you’ll also have the opportunity to shop around for this coverage on your own.

Best gap insurance companies in Virginia

The best gap insurance companies in Virginia strike a balance between affordable rates, high customer satisfaction, and a stable financial position. Here’s a closer look at some of the top options to consider.

American Family

Erie Insurance

USAA

Gap insurance vs. full coverage

Full-coverage car insurance goes beyond liability coverage to include comprehensive coverage and collision coverage. When your vehicle is damaged, a full-coverage policy will help you repair or replace your vehicle. But the policy limit is usually capped at the vehicle’s current cash value.

Gap insurance isn’t included in full-coverage policies. Instead, gap insurance is an optional coverage that you can add to your policy to protect against expenses after a total loss.

Who needs gap insurance in Virginia?

Here are some situations when purchasing gap insurance might make sense:4

• You made a down payment of less than 20% on the vehicle purchase.

• You financed the vehicle for a loan term of more than 60 months.

• Your vehicle will depreciate faster than the average car.

• Your new car loan amount includes negative equity from a previous car loan.

Of course, not everyone needs gap insurance. If you own your vehicle outright or can comfortably cover the gap in the event of an emergency, this coverage probably isn’t for you.

How to buy gap insurance in Virginia

If you decide you want to carry gap insurance, you can purchase it from a variety of sources. You can purchase gap insurance from a regular insurance company, and you may also be able to purchase it from your lender or the dealership.

In general, it’s usually more affordable to purchase gap insurance from an auto insurance company.

If you purchase it from your insurer, you can usually add this coverage to your existing policy. Most insurers require you to carry comprehensive and collision coverage as a baseline before adding gap coverage. But you’ll have the option to drop the coverage at any time.

As you look for gap coverage, remember to shop around. If you don’t compare quotes from multiple companies, you’ll likely overpay.