The Best Gap Insurance

Nationwide offers auto insurance policies with a customizable mix of liability, personal injury protection, medical payments, uninsured/underinsured motorist, collision, comprehensive, and gap coverages, among others. It boasts an impressive list of discounts and benefits. For example, people who bundle home and auto insurance save an average of $646. Nationwide isn’t a Fortune 100 company by accident; its size and financial strength are two of the reasons we chose Nationwide as the best overall gap insurance provider of 2023.

Nationwide SmartMiles Program

Nationwide’s SmartMiles program provides car insurance for low-mileage drivers. Nationwide determines your monthly rate by adding a variable rate based on your monthly mileage to a set base rate. If you drive less than the average driver, whether because you work from home or because you drive your new car for special occasions only, SmartMiles may save you money. This program is unavailable in Alaska, Hawaii, Louisiana, North Carolina, and New York.

Nationwide Gap Insurance

Here is a breakdown of what Nationwide’s gap insurance does and does not cover. It covers the below circumstances:

• Damage to your vehicle
• Theft in the event your car is stolen and not recovered
• Negative equity, or the gap between what you owe on your auto loan and the car’s actual cash value (ACV)

Nationwide’s gap insurance does not cover any of the following:

• Property or bodily injury
• Deductible costs
• Engine failure or other mechanical repairs
• Lost wages, medical expenses, or funeral costs

Nationwide Financial Health

AM Best, a credit rating agency specializing in insurance companies, gave Nationwide a financial strength rating of A+.² This score recognizes Nationwide’s ability to meet its ongoing financial obligations, including policies and contracts. Nationwide’s financial stability and sustainability enable it to meet its financial obligations to clients.

Travelers is one of the largest property and casualty insurance product providers. It offers a new car discount when you purchase or own a car that is less than three years old. In addition, the new car replacement coverage extends for the first five years of your vehicle’s life. Consider Travelers if you are looking for new car auto insurance with extensive gap coverage.

Premier New Car Replacement Coverage

Gap insurance is most important for new car owners and lessees. Travelers caters to new car owners with car replacement coverage. This coverage package replaces a new vehicle with a brand new vehicle of the same make and model if you total yours in the first five years of ownership. The new car replacement coverage covers the cost of a new car minus the applicable deductibles if you total your car in a covered loss.

This coverage excludes fire, theft, larceny, and flood losses. Travelers may also apply a lower glass deductible in place of your comprehensive deductible for a glass-only loss of your windshield, windows, and exterior lights or mirrors.

Electric Vehicle Discount

Plug-in vehicle sales increased by 38 percent between 2021 and 2022.³ As electric and hybrid vehicles become more popular, it helps to pair standard and gap coverage with discounts that cater to electric vehicle owners. Travelers provides a specific discount for hybrid and electric car drivers. If you own or lease a hybrid car, you may be eligible for the hybrid car insurance discount from Travelers.

Gap Coverage from Travelers

Travelers’ gap coverage pays the unpaid balance on your loan or lease if you experience a covered loss under your comprehensive or collision insurance. Its loan/lease gap coverage does not cover carryover balances, lease penalties, overdue payments, or extended warranties. To qualify for Travelers’ gap coverage, you must be the original owner of a financed or leased vehicle purchased from a new car dealer, not from a previous owner.

Kemper services 6.2 million affordable insurance policies. The company specializes in personal auto insurance for drivers who have difficulty obtaining or maintaining insurance coverage. Working with 34,500 agents and brokers across all 50 states and the District of Columbia, Kemper services over 6 million policies. Kemper calls its gap insurance product auto loan/lease coverage, which pays the difference between your car’s ACV and the outstanding value on your loan or lease.

Kemper Total for New Cars

Kemper offers customizable coverages, deductibles, and limits. Its auto policies include the following options:

• Kemper Prime Auto Enhanced: Auto Enhanced combines popular policies, including a waiver of the first accident or minor violation, a diminishing deductible for safe driving, a waiver of deductible when someone hits your parked car, personal property protection, trip interruption expenses, and key replacement.
• Kemper Total: Kemper markets Kemper Total to new car owners. This coverage pays above the ACV for repairs or the purchase of a new car, if necessary. Kemper’s gap coverage pays the difference between the ACV and the outstanding amount on your loan or lease.

Auto Insurance for International Licenses

Kemper specializes in personal auto insurance options for unusual circumstances, like a driver who uses an international license. Depending on your home country, the U.S. may accept your foreign license. If not, apply for an international driving permit.

Kemper’s policy options apply to those who only have state IDs or Matricula Consular (ID cards issued by the Government of Mexico), as well as those with licenses from other countries. If you’re moving to the U.S. from Canada, learn how to handle car insurance in your new country.

Anti-Theft Technology Discount

Kemper offers a discount if your car has an active or passive device that disables the car. Passive devices arm themselves automatically when you turn the vehicle off or remove the key from the ignition, including automatic locking doors. Active devices require an independent action, like pushing a button.⁶ Take advantage of the latest anti-theft technology installed in your new vehicle with this discount.

Clearcover is a relatively new insurance company founded in 2016. Available in 21 states, Clearcover uses InsurTech, a series of technologies including software and proprietary algorithms, to provide cheap auto insurance. Clearcover is one of our top five least expensive auto insurance carriers, a distinction even more enticing for active duty military who can receive a special discount.

Active Military Discount

Active military members and veterans in any state where Clearcover provides insurance products can get a 15 percent discount on their policy premiums with Clearcover. Clearcover discounts apply to active duty, junior, or senior cadets at a military academy, retired members of the Armed Forces of the U.S., and members of the National Guard/Reserves. In Louisiana, this discount increases to 25 percent and expands eligibility to children of active military members. No wonder Clearcover is one of the best car insurance companies for the military.

Deployed Driver Discount

If you work overseas due to civilian occupational requirements or military service, you may not drive your new car very often. If so, you can combine Clearcover’s gap coverage with a deployed driver discount, which decreases your premium and covers you in the event of an unexpected accident when you drive your vehicle stateside.

Alternate Transportation

Clearcover provides a flexible alternative transportation feature for covered accidents. If you’re waiting for your car to be replaced or repaired, Clearcover will provide money for alternate transportation in whichever form you prefer, such as rental coverage, a rideshare pass or Uber credits.

Safeco is a Liberty Mutual Insurance company, which means Liberty Mutual backs Safeco with the financial strength of a Fortune 100 U.S. corporation. Safeco sells insurance products exclusively through independent agents.

Safe Driving Benefits

It’s right there in the name: Safeco is best for safe drivers. The company provides accident forgiveness, which waives the first accident on your policy after a few years without an at-fault accident or violation. Other benefits to safe drivers include an automatic reduction to your policy premium and a diminishing deductible.

Safeco will automatically mail you a check for 2.5 percent of your policy premium (up to 5 percent each year) if you are claims-free in a six-month review period. Safeco’s collision deductible will decrease at every renewal if you do not file claims against your policy. The deductible will decrease for up to five years or until you reach the $500 maximum.

Safeco’s safe driving rewards continue with RightTrack. This program recognizes your safe choices, tracking braking, acceleration, nighttime driving, and mileage. Safeco guarantees a discount for participating, and you could save up to $513 per year for the life of your policy.

Safeco New Vehicle Replacement

Safeco’s gap insurance, or new vehicle replacement coverage, will pay the value of a comparable new car if yours is totaled or stolen. Your vehicle is eligible if you’re the original owner, it is less than one year old, and has fewer than 15,000 miles on it. This coverage is optional, as is Safeco’s rental car reimbursement. Safeco will help cover rental car costs as you wait for your replacement car.

Customer Service

Safeco provides customer service online, on its mobile app, or through its network of agents. Its mobile app earned 4.8 out of five stars on the App Store and 4.1 stars from users on the Google Play store. You can log in to pay your bill, get policy documents and file a claim.

Here is a breakdown of Safeco’s customer service offerings:

Another Safeco customer satisfaction rating comes from J.D. Power. Safeco’s Overall Customer Satisfaction Index Ranking is 829 out of 1,000.⁷ In the Central region, Safeco’s ranking is below the regional average of 841, but it  rates higher than Travelers and Nationwide in the same region.