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Last updated: October 4, 2023

Guide to Gap Insurance in Georgia

You’ve totaled your car, which you bought using an auto loan. Now what?

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In 2022, the average auto loan balance in Georgia was $24,673, a nearly 8 percent increase from the previous year, according to data from Experian. But what happens if your leased or financed vehicle gets totaled or stolen? Gap insurance is a way that you can avoid paying off the loan/lease if your vehicle is totaled or stolen. Let’s see how it works in Georgia.

What Is Gap Insurance?

Gap insurance, which stands for guaranteed asset protection, is a contractual agreement between a lease/loan provider and its borrower in which the borrower pays a fee in order to be able to cancel and waive the rest of their lease or loan if a car is totaled or stolen.

What Does Gap Insurance Cover?

  • Total losses from physical damage
  • Uncovered theft of the entire vehicle
  • The remaining amount you owe on your loan/lease after either of the above two incidents

What Does Gap Insurance Not Cover?

  • Collision or comprehensive deductible
  • Missed loan payments or late fees
  • Total losses of vehicles from mechanical issues, including engine failure
  • Bodily injuries
  • Lost wages
  • Funeral costs


If you do not have comprehensive or collision coverage at the time of your accident or theft, you will not receive your car’s actual cash value from insurance companies in Georgia. Collision and comprehensive coverage insurance is an optional add-on you can buy from any auto insurance company in Georgia.

How Gap Insurance Works

Imagine you total your car in an accident and you still have $10,000 left on the loan. If you had gap insurance at the time of your accident, you wouldn’t have to pay the remainder of your loan. Rather, you would have to pay only your collision deductible, and then your collision insurance would pay to replace your car. If your car was stolen, however, comprehensive coverage would replace collision, which also includes a deductible.

If you didn’t have gap insurance, you’d still be on the hook for that remaining $10,000 on your loan or lease, which could seriously add to your new-car buying costs, as collision/comprehensive coverage reimburses you only for your car’s actual market value at the time of the accident, which is less than what you paid for it in most cases.

The Cost of Gap Insurance in Georgia

See how much gap insurance in Georgia costs with our proprietary data below.

By Provider

To find the cheapest gap insurance in Georgia, it’s best to buy it as an add-on to an existing policy. It will be much more expensive if you purchase it from your car manufacturer, dealership, or lender.

Average annual cost of gap insurance in Georgia Minimum Maximum
Car manufacturer $200 $700
Dealership/lender $350 $700
Add-on to existing car insurance policy $20 $30
New car insurance policy $200 $300

That being said, not all insurance companies offer gap insurance, so you may not have many options. If you’re willing to change providers, check out the best gap insurance companies.

By Company

Last but not least, you’ll find the cheapest gap insurance with Midvale Home & Auto, especially if you bundle homeowners and auto insurance. The following companies offer gap coverage in Georgia.

Average annual cost of gap insurance in Georgia Minimum Maximum
Arrowhead $609 $609
AssuranceAmerica $394 $394
Bristol West $390 $390
Direct General $315 $315
Infinity $631 $631
InsureMax $385 $385
Mercury $337 $337
Midvale Home & Auto $299 $299
SafeAuto $322 $322
The General $440 $440

Gap Insurance Laws in Georgia

In Georgia, lessors can’t force people to buy gap insurance as a condition of a lease or an auto loan. Here are some other laws surrounding gap insurance in Georgia:

  • You can pay either in a single payment or on a monthly/periodic payment plan.
  • In the gap insurance waiver, companies must disclose the purchase price and terms, the cancellation and refund policy, and the name and address of all involved parties.
  • There must be a “free look” period in which customers can cancel their gap waivers for a full refund. Beyond that period, they must cancel within 90 days before the expiration date, and the request for cancellation must be in writing.

If gap insurance providers do not follow the laws, they’ll have to cease and desist their operations and pay a per-violation fine between $500 and $10,000.1

How Much Gap Insurance Do You Need?

The amount of gap insurance you get should be equal to the amount on your auto lease or loan. That way, you can be sure that you won’t have to pay anything out-of-pocket to complete your loan or lease if your car is stolen or totaled.

Should You Purchase Gap Insurance?

Since Georgia prevents companies from requiring gap insurance, it’s your choice whether you want to buy it, and it doesn’t make sense for all parties.

You should get gap insurance if:

  • You leased your vehicle.
  • You owe more on your car than it’s worth.
  • You put down less than 20 percent on your loan.
  • Your loan or lease term is five years or more.
  • You rolled over negative equity from an old car loan to a new car loan.2


In 2022, about 8 in 10 people financed their new car, while 40 percent financed their used car, with average loan terms of 70 and 68 months, respectively.3

However, you should not get gap insurance if:

  • You own your car outright.
  • Your car is not a luxury vehicle.
  • You are not underwater on your loan.
  • Your down payment was more than 20 percent of your vehicle’s purchase price.
  • Your loan or lease term is less than 60 months.
  • You did not have any negative equity in your new car loan.

How to Get Gap Insurance

There are many ways you can get gap insurance. You can buy it at the same dealership where you purchased your car, you can get it from your car’s manufacturer, or you can buy it from an insurance company, either as an add-on to an existing policy or as a stand-alone waiver. We recommend buying gap insurance from your insurance company, ideally as an add-on, to get the lowest price. The cheapest and best Georgia insurance companies for gap waivers are:

  • Midvale Home & Auto
  • Direct General
  • SafeAuto
  • InsureMax
  • Mercury


Make sure to buy your gap insurance before you drive your vehicle off the lot, as it can be totaled or stolen at any time.


Learn more about gap insurance, which in some states other than Georgia, loan or lease providers can require as a term of the loan/lease.


  1. Subject 120-2-102 GUARANTEED ASSET PROTECTION WAIVERS. Rules and Regulations of the State of Georgia. (2023).

  2. What is gap insurance? Insurance Information Institute. (2023).

  3. Average Auto Loan Balances Grew 7.7% in 2022. Experian. (2023, Apr 26).