How much is gap insurance in Nebraska

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Gap insurance, offered by providers like Auto-Owners and Nationwide, protects drivers who lease or finance their vehicles by covering the difference between the car’s actual cash value and the remaining loan or lease balance if it’s totaled or stolen. This coverage is also commonly called loan or lease payoff insurance.

Where you live plays a big role in how much you’ll pay for gap insurance. Drivers in Nebraska spend about $1,989 per year, or roughly $166 per month, on average.

What is gap insurance?

Gap insurance protects you if your car is totaled or stolen and your loan balance is higher than the car’s value. It pays the difference between what your car is worth and what you still owe, so you’re not stuck covering that amount yourself.

If you’ve financed your car, it’s likely worth less than what you owe-especially in the first few years. That difference can leave you financially vulnerable if your vehicle is totaled or stolen.

Insurance companies pay out the actual cash value of your car if it’s totaled, which is usually less than what you owe on your auto loan. Without gap insurance, you’ll have to pay the remaining loan balance yourself. With gap insurance, that financial gap is covered.

“When an accident or theft occurs, a driver usually gets paid out on the vehicle’s cash value from their standard insurance coverage,” says Richard Howe, a car accident attorney in Atlanta. “However, without gap insurance, you will still be on the hook for the remaining amount in your agreement. Gap insurance provides peace of mind to drivers that they will be financially protected.”

“For instance, let’s say your car is totaled and the actual cash value is determined to be $15,000. However, you still owe $20,000 on your loan. Traditional auto insurance would only cover up to the actual cash value, leaving you with a $5,000 deficit,” says Howe.

“But if you have gap insurance, this difference would be covered, relieving you of the financial burden.”

Average cost of gap insurance in Nebraska

The cost of gap insurance varies depending on your insurance company, location and the type of car you drive. On average, gap insurance in Nebraska costs $1,989 annually or $166 each month.

“Gap insurance is an optional coverage that is usually very reasonably priced, typically less than $100 per year in additional premium when added as an endorsement to your existing auto insurance policy,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute, an insurance industry trade group.

“Gap insurance rates are based on the amount of your loan or lease agreement. It is typically not based on other common rating factors such as credit record.”

Cheapest gap insurance companies in Nebraska

Auto-Owners has the cheapest gap insurance rates in Nebraska at $1,238 per year or $103 per month. On the other hand, Progressive offers the most expensive premiums at $1,998 annually or $167 monthly.

The table below shows average annual gap insurance rates from different insurance companies in Nebraska.

How much is gap insurance per month in Nebraska?

Gap insurance costs differ, but here’s what you might pay each month:

Gap insurance rates in Nebraska’s top cities

Your location can greatly impact the cost of gap insurance. The table below highlights the average yearly cost in the top metro areas across Nebraska.

Gap insurance rates for different vehicle types

The type of vehicle you drive also impacts how much you pay for gap insurance.

“Luxury cars, sports cars, and SUVs – typically with higher purchase prices – might also come with higher gap insurance premiums. That’s because these vehicles tend to depreciate at different rates compared to standard sedans or compact cars, posing a greater risk to insurers,” Howe says.

The age of your vehicle is also a key factor in determining gap insurance rates.

“Newer vehicles, which depreciate more rapidly in the first few years, represent a higher risk for insurers offering gap coverage. As a result, a brand-new car might attract a higher gap insurance premium compared to a model that is several years old,” Howe says. “This reflects the insurer’s risk assessment, considering the steeper depreciation curve and the greater likelihood of a significant gap needing coverage soon after the purchase.”

When does gap insurance expire?

If you’re still paying off your car or leasing it, gap insurance can give you peace of mind in case it’s totaled and you owe more than it’s worth.

“However, Gap insurance is typically most relevant during the first few years of new car ownership,” Howe says.

That’s usually when you owe more on your loan than the car is worth.

“Most car buyers benefit from gap insurance when the vehicle is less than three model years old. This coverage is usually aligned with the duration of the car loan or lease, often making it unnecessary beyond a few years because the loan balance decreases to fall below the car’s actual cash value,” Howe says.

It’s a good idea to cancel gap coverage when your loan balance is lower than your car’s actual cash value – in fact, many insurers will cancel this coverage after a few years for this exact reason.

Where to buy gap insurance

There are three main ways to get gap coverage, and each has its own pricing and rules.

• Your insurance company: Many national and regional car insurance companies offer gap coverage as an optional add-on to your auto policy, usually for $20 to $40 a year. Since it’s part of your car insurance policy, you can drop it once your loan amount is lower than the car’s actual value.
• Dealership: Many finance managers offer gap insurance, usually for $400 to $700. The charge is added to your loan, which makes it easy, but you’ll likely pay more in the long run because of the added interest amount.
• Banks and credit unions: Some banks and credit unions sometimes sell gap insurance as a standalone policy. It’s typically affordable, but cancellation policies differ – some will refund any unused premium, while others won’t.

Take time to shop around, compare prices, review cancellation policies and look for perks like deductible coverage. A few minutes of research could save you hundreds over the life of your loan or lease.

The bottom line

Gap insurance can be an affordable way to protect yourself from paying thousands out of pocket if your car is totaled or stolen. Rates vary by state, vehicle type, and personal factors, so it pays to shop around and compare quotes from multiple insurers.

Consider whether the age and value of your financed or leased car justify the added protection, and don’t hesitate to ask questions when reviewing policies – understanding the details now can save you a costly surprise later.

Methodology

Insure.com commissioned Quadrant Information Services in 2023 to get annual and monthly gap insurance rates for male and female drivers aged 40 who drive a Honda Accord LX with a clean driving record and good insurance score and carry a full coverage car insurance policy with limits of 100/300/100 and $500 comprehensive/collision deductibles.

To evaluate the rates, we have compared 53,409,632 insurance records from 170 insurance companies across 29,152 cities and 34,588 ZIP codes across the nation.

Shivani Gite

Contributing Writer

 

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Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions.