Florida Gap Insurance: Laws and Companies Offering Coverage
Find Cheap Auto Insurance Quotes in Florida
Gap insurance is not required by Florida law, but drivers in the state may need to buy it as a condition of a lease or auto loan. You may also want a gap insurance policy if you've financed a new car. Otherwise, if your car is totaled or stolen, you may end up owing more money on the car than you'd receive from other coverage.
In Florida, you can buy gap insurance from either your lending company, your auto insurance company, or the dealership where you bought or leased the car. Start by getting a quote from your insurance company, which will often offer the best gap insurance rates.
How does gap insurance work in Florida?
Gap insurance is optional in Florida, but it may be required for an auto loan. If your car is totaled or stolen, gap coverage would pay any money you owe on the car that's over the payout from your comprehensive or collision insurance. To buy a gap policy, most companies will require you to have comprehensive and collision coverage. But these are common requirements for financed vehicles.
If your loan or lease is for a fairly new car, gap insurance can be valuable, as you may owe more on the car than it's currently worth (the vehicle's actual cash value). This is because insurance companies use the car's depreciated (actual) cash value to calculate how much you'll get if your car is totaled.
Say you purchased a new car for $30,000 last year, and your insurance deductible is $1,000. The car has lost value since you bought it, and it's now worth $24,000 — even though you still owe $27,000. If you total your car, collision insurance would cover the car's actual cash value of $24,000, minus the $1,000 deductible. So you would receive $23,000. That means you would have to pay the lender $4,000 out of pocket. Gap insurance would cover that $4,000.
Car dealerships and auto loan companies can also provide gap insurance in Florida. Policies can vary slightly between insurance companies in Florida. For instance, not all will pay your deductible. Using the example above, that would mean you'd have to pay the $1,000 deductible, but gap insurance would cover the other $3,000 owed on the auto loan.
Where can I buy gap insurance in Florida?
In Florida, you can buy gap insurance from your car insurance company, or ase a stand-alone policy from your car dealer or lender. Ask your current insurance company about adding gap insurance to your policy first. This is usually the cheapest way to get coverage. The cost of gap insurance from your insurance company may be as low as $5 per month, but a gap waiver from a dealership is often a few hundred dollars at least. Not all car insurance companies offer third-party gap insurance, but most of the top Florida insurance companies do.
When you're shopping for gap insurance, compare quotes from multiple companies to get the cheapest rate. And make sure you understand the details of each policy before choosing one. Some companies may have the following limitations.
- Restrict the amount of gap coverage, based on the value of the car
- Require you to purchase other forms of insurance
- Won't consider your deductible as part of the "gap" and won't pay it
- Require your car to be within a certain range of model years or have a minimum value
Gap insurance companies in Florida
Of the largest auto insurance companies in Florida, the following offer either gap insurance or a similar policy.
- State Farm (if you use State Farm to finance your loan)
- Progressive
- Allstate
- USAA (called total loss protection)
- Liberty Mutual (only offers new car replacement coverage, which isn't available for leased cars)
- Infinity
- Travelers
- Farmers (called residual debt coverage)
Florida gap insurance laws
According to Florida law, gap insurance is considered a form of credit insurance. Any owner or principal of a business that sells gap insurance needs to be licensed as a credit insurance agent by the Florida Department of Financial Services and fingerprinted. There's no licensing exam, but the person must be one of the following.
- An officer, salaried representative or commissioned representative of a life or health insurance company. But they cannot be licensed to sell other classes of life or health insurance.
- Employed by or associated with a lending institution, financial institution or credit company. In this case, they would only be licensed to sell gap insurance to people who use the institution to finance a vehicle.
Unlike owners and principals, employees of a business are not required to be licensed. But a business that sells gap insurance through multiple branches, such as local auto dealerships, needs to have a license for each branch . These licenses only need to be gotten once and don't have to be renewed.
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