Gap Insurance in Virginia (2025)
Gap insurance gives your wallet extra protection when you finance or lease your vehicle. But the optional coverage comes at a cost.
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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 $179 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.
Quick Facts
Gap insurance covers the difference between your vehicle’s current value and your remaining loan balance.
Without gap insurance, you’ll be on the hook for the remaining loan balance if the car is totaled.
Getting gap insurance will add to your auto insurance premium costs.
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.
Important Information
Gap insurance, or guaranteed asset protection insurance, is an optional coverage to protect you from having to pay off a totaled vehicle on your own. Instead, the insurance company will help cover the difference.
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
Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page.
The car insurance data includes coverage analysis and details on drivers’ vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums. The data included on this page represent averages across all ages, genders, credit scores, and driver profiles for Virginia drivers.
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.
Virginia gap insurance FAQs
If you’re looking for gap insurance in Virginia, this additional information may help as you research your coverage options.
Does Virginia require gap insurance?
No. The Commonwealth of Virginia doesn’t require drivers to carry gap insurance.5 Although this type of insurance coverage isn’t required by law, it can be a useful way to protect your financial interests. If your vehicle’s current value is less than your remaining vehicle loan balance, gap insurance is worth considering.
What are the cons of gap insurance?
The major disadvantage of gap insurance is that you’ll face higher auto insurance premiums when you add this optional coverage. But while you’ll pay more for your auto insurance, you’ll also have more financial protection.
When can you cancel gap insurance?
You can cancel gap insurance at any time by letting your insurer know. Once your car’s value is higher than the remaining loan balance, it makes sense to cancel your gap coverage. But even if your vehicle’s market value is less than the remaining loan balance, you have the option of canceling your gap coverage.
Do you need gap insurance for a leased car?
When you lease a vehicle, you may need to purchase gap insurance. In fact, some lessors require drivers to carry gap insurance on the vehicle. But even if the lessor doesn’t require you to carry it, gap insurance still offers important financial protection. If you’re leasing a vehicle, gap insurance covers the difference between the car’s market value and what you owe on the lease.
Can you buy gap insurance after you’ve already purchased a car?
Yes. It’s usually possible to purchase gap insurance on a vehicle you’ve already purchased. The catch is that your vehicle’s market value must be less than the remaining loan balance. But some insurance companies may limit when you can purchase this coverage.
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