If you’re financing or leasing a car, you may have come across the term gap insurance. And if you’re considering Allstate for your auto coverage, you might be asking: does Allstate have gap insurance? The short answer is yes, but there’s more to the story. Let’s break it down.
What Is Gap Insurance and Why Does It Matter?
Before diving into Allstate specifically, it’s important to understand what gap insurance is and why you might need it.
Understanding Gap Insurance
Gap stands for Guaranteed Asset Protection. In simple terms, it’s designed to cover the “gap” between what your car is worth and what you still owe on it. A common question people ask is, Does Allstate Have Gap Insurance for situations like this? Let’s say you finance a new car for $30,000. A year later, the car is totaled in an accident, and its actual cash value (ACV) is now $22,000. Your loan, however, still has a $27,000 balance. That $5,000 difference? Gap insurance covers it.
Who Needs Gap Insurance?
Gap insurance isn’t for everyone. It’s especially beneficial for people who:
- Put down a small or no down payment.
- Lease a vehicle.
- Have long-term loans (typically over 60 months).
- Buy a vehicle that depreciates quickly.
If you fall into one of these categories, gap insurance can protect you from financial headaches.
So, Does Allstate Offer Gap Insurance?
Yes, But It’s Called “Loan/Lease Gap Coverage”
Does Allstate Have Gap Insurance? Yes, Allstate does offer gap insurance, although it might not always go by that exact name. With Allstate, it’s commonly referred to as Loan/Lease Gap Coverage. This optional add-on can be included in your auto policy when you’re leasing or financing a vehicle.
What it does is pretty straightforward: if your car is totaled or stolen, and the insurance payout is less than what you owe, Allstate’s Loan/Lease Gap Coverage helps pay the difference—just like traditional gap insurance.
How to Get It
Not all Allstate policies include gap coverage automatically. You must:
- Specifically request it.
- Be leasing or financing a vehicle to qualify.
- Usually add it within a certain time frame from purchasing or leasing the car (usually within the first 2 years).
Your local Allstate agent can walk you through whether you qualify and how much it would cost.
What Does Allstate Gap Insurance Cover?
Covered Situations
Allstate’s gap coverage typically applies when:
- Your car is stolen and not recovered.
- Your car is totaled in an accident (regardless of fault).
- The payout from your collision or comprehensive coverage is less than the loan/lease balance.
This coverage is usually added on top of your comprehensive and collision coverage. That means you’ll need those in place first before gap insurance can be added.
What’s Not Covered
Gap insurance, including Allstate’s version, does not cover:
- Repairs or replacement for non-totaled vehicles.
- Past due payments or late fees on your loan.
- Extended warranties or other products rolled into your loan.
- A new car replacement value (unless you also opt for Allstate’s New Car Replacement add-on).
Keep in mind: gap coverage isn’t designed to help you buy a new car—it’s just to clear your existing debt if the worst happens.
How Much Does Allstate Gap Insurance Cost?
Average Cost
On average, Allstate gap insurance might cost between $20 to $40 per year, added to your existing premium. That’s quite affordable when you consider the peace of mind it provides.
Compare that to dealership gap insurance, which can cost $500–$700 as a one-time fee rolled into your financing, and it’s easy to see why getting it through your insurer could be the smarter route.
Factors That Affect the Price
Like other car insurance add-ons, the cost can vary based on:
- Your vehicle’s make, model, and year.
- Your driving history and credit score.
- The length and terms of your loan or lease.
- Your location and state requirements.
The best way to know the exact cost? Ask your Allstate agent for a quote with and without gap insurance.
Pros and Cons of Allstate Gap Insurance
Here’s a quick look at the ups and downs.
✅ Pros:
- Affordable: Usually cheaper than dealership options.
- Convenient: Easily added to your existing Allstate auto policy.
- Peace of Mind: Protects you from owing thousands on a totaled vehicle.
❌ Cons:
- Limited Availability: May only be available within a set time after purchase.
- Not Always Automatic: Must be specifically added to your policy.
- No Replacement Value: Doesn’t help you get a new car—just pays off the old loan.
Alternatives to Allstate Gap Insurance
1. Dealership-Provided Gap Coverage
Most dealerships offer gap insurance when you lease or finance a car. While convenient, it’s typically much more expensive and often rolled into your loan (meaning interest charges apply).
2. Standalone Gap Insurance Providers
Some third-party insurance companies or credit unions offer standalone gap policies, which might be worth looking into if you’re not an Allstate customer or want more flexibility.
3. New Car Replacement Coverage
Allstate also offers New Car Replacement Coverage, which may be more suitable if you want to replace your car, not just pay off your loan. It pays for a brand-new car of the same make and model, not just the depreciated value. However, this is usually offered only for newer cars.
How to Know If You Still Need Gap Insurance
At some point in your loan or lease, your loan balance and vehicle value may equalize. When that happens, gap insurance may no longer be necessary.
Ask yourself:
- Do I owe more on the loan than the car is worth?
- Would I be financially okay if my car were totaled tomorrow?
If you’re no longer “upside down” on your loan, you may be able to remove gap insurance and save on your premium.
Final Thoughts: Is Allstate Gap Insurance Worth It?
In most cases, yes—especially for new cars and long loans. If you’re asking, Does Allstate Have Gap Insurance? The answer is yes. Allstate’s Loan/Lease Gap Coverage offers affordable financial protection and peace of mind. While it might not be necessary for everyone, it’s worth considering if you’d struggle to cover the difference between your car’s value and loan balance after a total loss.
If you’re already an Allstate customer or planning to become one, ask your agent:
- Does my loan/lease qualify?
- How much would gap insurance cost for me?
- How long can I keep this coverage?
