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Last updated: October 17, 2023

Guide to Gap Insurance in Pennsylvania

If you got a loan or a lease for your vehicle, you’ll need gap insurance.

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When it comes to car insurance, Pennsylvania requires only liability coverage and medical payments coverage, with limits of $15,000 per person and $30,000 per accident under bodily injury, $5,000 for property damage coverage, and $5,000 for medical benefits. But if you obtained a loan to buy your car or if you leased it, your loan provider or lessor will probably require that you buy gap insurance as well. But what is gap insurance, and how do you buy it in the first place?

What Is Gap Insurance?

Gap coverage is a type of insurance that would cover the remainder of your lease or loan if your vehicle was totaled, which in Pennsylvania, means that its salvage value is less than the cost of the repairs.1 In other words, if you totaled your car, you wouldn’t be responsible for paying the remainder of the lease or the loan; instead, your gap insurance would kick in.

What It Covers

Gap insurance applies to car accidents and auto thefts.

What It Doesn’t Cover

Gap insurance does not cover your deductible if you have collision insurance or a comprehensive coverage claim. It will also not cover missed loan payments or late fees, total losses from mechanical failures, bodily injuries, funeral costs, lost wages, or any medical expenses — only vehicle losses.

How Gap Insurance Works for Financed or Leased Vehicles

Imagine you bought a new car with a loan of $40,000 and gap insurance and a month later your car was totaled in an accident. Let’s say the vehicle would cost $20,000 to repair, but its salvage value is only $10,000. If that’s the case, you’d pay your deductible for collision coverage, and then your gap insurance would pay the remainder of your loan.


If you want insurance to replace the totaled car, you’d need new car replacement coverage in addition to gap insurance.

The Cost of Gap Insurance in Pennsylvania

In Pennsylvania, gap insurance costs around $200 to $700 per year. It’s most affordable if you buy it as an add-on to your existing car insurance and more expensive if you buy it from your car’s manufacturer, your dealership, or your lender.

Cost of Gap Insurance by Provider Minimum Cost Per Year Maximum Cost Per Year
Manufacturer $200 $700
Dealership/lender $200 $700
Add-on to existing policy $20 $40

Here are the average prices for gap car insurance coverage in Pennsylvania.

Cost of Gap Insurance by Auto Insurance Carrier Minimum cost per year
Bristol West $267
Clearcover $149
Dairyland $242
Direct General $223
Liberty Mutual $220
Midvale Home & Auto $189
Plymouth Rock $170
Progressive $139
SafeAuto $244
Travelers $131


Pennsylvania does not require gap insurance, only liability and medical payments coverage, so there are no laws surrounding it.


Learn more about Pennsylvania car insurance laws below:

How Much Do You Need?

The amount of gap insurance you need is equal to the size of your loan or lease because you could total your car as soon as you leave the dealership. You want to make sure that if that happened, you wouldn’t be responsible for paying the balance out of pocket.

Is It Worth It?

Gap insurance isn’t only worth it; if you have a loan or lease, it’s most likely required, along with collision and comprehensive coverage.

Who Should Buy Gap Insurance

You should buy gap insurance if …

  • You are leasing your vehicle.
  • You owe more on your car than it’s worth.
  • You put down less than 20 percent when you financed your car.
  • Your financing term is five years, or 60 months, or longer.
  • You rolled over negative equity from an old car loan into your new car loan.
  • Your vehicle is a luxury car, which depreciates faster than average.


Check your car’s actual cash value (ACV) on websites like the Kelley Blue Book2 and Edmunds.3 If your car’s ACV is less than your loan balance, you are underwater on your loan or have negative equity.

Who Should Not Buy Gap Insurance

You don’t need gap insurance if …

  • You own your car outright.
  • You put down more than 20 percent when you financed your vehicle.
  • Your car holds its value over time, historically.
  • Your loan is less than five years long.

How to Get Gap Insurance

Here’s how to find the best gap insurance.

When to Get It

Make sure to get gap insurance before you drive your financed or leased vehicle, as you can total it at any time.


Your main options for getting gap insurance are as follows:

  • As an add-on to your existing auto insurance policy
  • Through the manufacturer or lender
  • Through a car dealership

Again, if your insurance company offers it, it’s cheapest to get gap insurance from your existing insurer. Request a car insurance quote today.

Best and Cheapest Companies

Some companies that offer gap insurance in Pennsylvania include the following:

  • Allstate
  • Bristol West
  • Clearcover
  • Dairyland
  • Direct General
  • Esurance
  • Liberty Mutual
  • Midvale Home & Auto
  • Nationwide
  • Plymouth Rock
  • Progressive
  • Safe Auto
  • The Hartford
  • Travelers


There are many advantages to paying for your car with an auto loan or leasing your car on a short-term basis. However, one disadvantage is that you will have to buy more car insurance coverage — not only just gap insurance, but also comprehensive and collision coverage. Of course, you’ll appreciate these coverages if you total your car, whether that occurs in the Keystone State or anywhere else in the country.

While it’s not nearby, if you want to learn more about gap insurance in another state, read our article on gap insurance in Arizona. Just like in Pennsylvania, Arizona drivers can benefit from getting their gap insurance from their existing car insurance provider, which would cost around just $25 annually.

Learn more about how car insurance works for leased vehicles, which have more car insurance requirements than vehicles you buy outright. Since you’re not the owner, the lessor will want to protect its property from risk, and that means making sure it will get the total value back if the car is totaled.


  1. Total Loss Threshold by State. Appraisal Engine. (2017, Aug 12).

  2. My Car’s Value. Kelley Blue Book. (2023).

  3. How much is my car worth: Instant used car value and trade in value. Edmunds. (2023).