Gap Insurance in Massachusetts (2024)
If your car sustains severe damage and is a total loss, gap insurance can step in to protect your finances.
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Written byJacqueline DeMarco
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13+ years writing insurance and personal finance content
Insurance, lending, and retirement expert
Jacqueline has contributed content, and her personal finance passion, to dozens of noteworthy financial brands, including Credit Karma, Bankrate, and MagnifyMoney.
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Edited byChris Schafer
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15+ years in content creation
7+ years in business and financial services content
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Updated November 21, 2024
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Table of contents
If you’re considering financing a new car in Massachusetts, it’s important to understand how gap insurance works.
Gap insurance acts as a safety net to protect you from potential financial gaps in the event of a total loss from accident or theft. This coverage is especially useful for people who lease or finance their cars.
Full-coverage insurance costs $231 per month in Massachusetts. Adding gap coverage typically costs an extra $2 per month. Here are the ins and outs of gap insurance in Massachusetts, its benefits, and why it’s essential for people with leased cars or car loans.
Quick Facts
Gap insurance adds $20, on average, to your annual premium, according to the Insurance Information Institute.[1]
Buying gap insurance through an insurance company is usually cheaper than buying it from an auto dealer.
Many insurance companies offer gap insurance as an endorsement.
How gap insurance works
Gap insurance — also known as guaranteed auto protection insurance — is a type of insurance coverage that helps protect you from financial loss in the event of a total-loss accident or theft. It covers the “gap” between the vehicle’s actual cash value (ACV) and the amount you still owe on the car loan or lease.
When you purchase a new car or truck, its value begins to depreciate instantly. Most vehicles experience a significant drop in value — often around 20% — within the first year. If you have a standard auto insurance policy, it typically covers the depreciated value of the vehicle. In other words, if your insurer declares your car a total loss, it’ll reimburse you for the current market value of the vehicle as of the time you file a claim.
But if you leased or financed the purchase of your new car with a down payment of less than 20%, the amount left on the loan or lease may be more than the market value of the vehicle in the initial years of ownership. This creates a gap between what your insurance company pays after a total loss and what you still owe on the loan or lease.
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What gap insurance covers in Massachusetts
Gap insurance covers the difference between the ACV that your insurance policy pays and the remaining amount you owe on the loan or lease. In the event of a total loss accident or theft, the gap insurance company pays off the remaining balance on your loan or lease, ensuring you don’t have to bear the financial burden.
For example, let’s say you purchased a car for $30,000 and took out a loan to finance it. A year later, the car is in an accident and your insurer declares it a total loss, reimbursing you for its actual cash value of $24,000. But you still owe $28,000 on your car loan.
In this scenario, your standard auto insurance will only pay you $24,000 based on the car’s ACV, leaving you with a $4,000 gap. With gap insurance, the insurance company covers this $4,000 gap, allowing you to pay off the loan completely.
Good to Know
It’s important to note that gap insurance typically has certain limitations and restrictions. It may have a maximum coverage limit, and it usually doesn’t cover other expenses such as deductibles, late-payment fees, or extended warranties. Additionally, it’s usually only available for new and leased cars, not used vehicles.
Best gap insurance companies in Massachusetts
If you’re looking for gap insurance in Massachusetts, these are some of the best gap insurance companies.
Liberty Mutual
| User Reviews | 3.7 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 7.7 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $134/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $252/mo |
3.7
A solid optionBased on 2671 verified guest reviews and ratings
How drivers feel about Liberty Mutual
Drivers appreciate the initial low prices, quick claims handling, and easy account access but dislike the significant price increases over time.
AI-generated from the text of verified reviews collected by Insurify
Best For
Numerous discounts
New and financed vehicles
Accident forgiveness
How drivers feel about Liberty Mutual
Drivers appreciate the initial low prices, quick claims handling, and easy account access but dislike the significant price increases over time.
AI-generated from the text of verified reviews collected by Insurify
Best For
Numerous discounts
New and financed vehicles
Accident forgiveness
Reviews (1,559)
Michael
November 19, 2024
Verified Review
Go Elsewhere
The customer service is poor. It's difficult to speak to a human as it's overly automated.
Deborah
November 12, 2024
Verified Review
Examine Every Inch of Your Policy
I didn't realize I didn't have accident forgiveness until my daughter had an accident. They tripled the cost of my policy.
Lee
November 12, 2024
Verified Review
Ugh!
The rates increase every year. I'm an excellent driver and I've never made a claim.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
819NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
3.95A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
AWhy we picked this company
Liberty Mutual offers new car replacement insurance, which helps drivers protect their vehicles against depreciation. If someone steals your car or you have an accident that totals your car within the first year, or before you reach 15,000 miles, this coverage will pay to buy a brand-new vehicle with the same make and model.
Pros
Wide range of available discounts
Accident forgiveness available
Available in all 50 states and D.C.
Cons
Many negative reviews and customer complaints
Premiums are relatively high compared to industry average
Low customer satisfaction scores from J.D. Power
USAA
| User Reviews | 4.9 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9.4 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $45/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $99/mo |
4.9
Best choiceBased on 1602 verified guest reviews and ratings
How drivers feel about USAA
Drivers appreciate the ease of working with the carrier, competitive rates, and responsive service but dislike the price increases and lack of rideshare add-ons in some areas.
AI-generated from the text of verified reviews collected by Insurify
Best For
Members of the military community
Outstanding customer service
Competitive rates
How drivers feel about USAA
Drivers appreciate the ease of working with the carrier, competitive rates, and responsive service but dislike the price increases and lack of rideshare add-ons in some areas.
AI-generated from the text of verified reviews collected by Insurify
Best For
Members of the military community
Outstanding customer service
Competitive rates
Reviews (914)
Gloria
November 15, 2024
Verified Review
Not Good for Claims
I have storm damage and the claim process is not satisfactory.
Martin
November 11, 2024
Verified Review
Price Shopping
I have been with USAA for over 60 years. Obviously, I've been very happy. Since I don't drive very far, I have been seeing advertisements for lower prices. However, I have no plans of leaving USAA.
Rena Sabine
November 8, 2024
Verified Review
Disappointing and inflexible service
My experience with this company has been disappointing, especially this second time around. I would suggest considering other options. From my recent interactions, they have been dismissive and argumentative. I have already started finalizing my next premium with another company. I'm perplexed as to how they receive praise when they treat clients in this manner.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
880NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
1.35A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A++Why we picked this company
USAA has some of the most affordable car insurance in Massachusetts. For gap insurance, you can ask about car-replacement assistance coverage, which gives policyholders a settlement with an additional 20% of the actual cash value of the vehicle if they file a claim and USAA declares their car a total loss.
Pros
High customer satisfaction
Low premiums
SafePilot program rewards good driving with up to 30% discount
Cons
Only available to active-duty military, veterans, military spouses, or children of service members or veterans
No 24/7 customer phone support
Customer reviews are mixed for service and claims processing
Allstate
| User Reviews | 4.0 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 8.9 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $61/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $133/mo |
4.0
Best choiceBased on 5648 verified guest reviews and ratings
How drivers feel about Allstate
Drivers appreciate the initial pricing and overall service but dislike the frequent rate increases and misleading pricing tactics.
AI-generated from the text of verified reviews collected by Insurify
Best For
Accident forgiveness
Wide availability
Cheap rates
How drivers feel about Allstate
Drivers appreciate the initial pricing and overall service but dislike the frequent rate increases and misleading pricing tactics.
AI-generated from the text of verified reviews collected by Insurify
Best For
Accident forgiveness
Wide availability
Cheap rates
Reviews (3,073)
Rodney
November 20, 2024
Verified Review
Lower Insurance
The insurance is too high.
Lyudmila
November 14, 2024
Verified Review
No Discount for Seniors
The service is mediocre.
Latonya
November 12, 2024
Verified Review
Not Recommended
I would not recommend Allstate. They did not support me when I needed them most. They didn't believe me or the other party when we said my first accident wasn't my fault. My agent incorrectly reported to the DMV that my insurance had lapsed when it hadn't. They increased my insurance rates four to five times within two years. A representative from my agent's office called me to sell renters insurance, promising a lower monthly rate, which turned out to be false. After I was involved in a hit and run, instead of ensuring my wellbeing, they raised my insurance again to almost $800/month. I find Allstate to be a disappointing car insurance company and I wouldn't recommend them to anyone.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
833NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.94A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A-Why we picked this company
Allstate is a solid option for Massachusetts drivers looking for gap insurance, and especially for people who work as rideshare drivers. With Ride for Hire coverage, rideshare drivers can get extra protection that their normal policy doesn’t offer to receive the coverage they need while working.
Pros
Ample opportunities for bundling discount
Offers a pay-per-mile option
A+ (Superior) financial strength rating from AM Best
Cons
Low customer satisfaction
Rates are merely average compared to other insurers
Below-average rank for customer satisfaction in many regions, according to J.D. Power’s 2024 U.S. Auto Insurance Study
Gap insurance vs. full coverage
In Massachusetts, full-coverage insurance generally refers to a combination of different types of auto insurance coverage that provide a higher level of protection than the state’s minimum required coverage.
In Massachusetts, the minimum required auto insurance coverage includes:[2]
$20,000 per person for bodily injury liability
$40,000 per accident for bodily injury liability
$5,000 per accident for property damage liability
$8,000 per accident for personal injury protection (PIP)
$20,000 per person and $40,000 per accident for uninsured motorist coverage
Full-coverage insurance includes these mandated coverages, plus comprehensive and collision insurance coverages. Comprehensive insurance pays for damages to your car not related to collisions like theft, vandalism, and weather damages.
Collision insurance pays for your car repairs from collision-related damages, like hitting a pole or another vehicle. But neither of these coverages pay the difference between your auto loan and lease and your car’s actual cash value after a total loss — that’s where gap insurance comes in.
Who needs gap insurance in Massachusetts?
Whether someone with full coverage needs gap insurance depends on their specific circumstances. It’s particularly beneficial for people who:
Made a small down payment: If you made a down payment of less than 20% on your vehicle, there’s a higher likelihood of the loan amount exceeding the market value, making gap insurance valuable.
Have a long-term loan or lease: If you financed your vehicle for 60 months or longer, the gap between the loan amount and the vehicle’s value may persist for a significant portion of the loan term, making gap insurance beneficial.
Lease a vehicle: Lessors often require gap insurance for leased vehicles, as it protects against potential financial gaps in the event of a total loss.
Purchased a fast-depreciating vehicle: Some vehicles depreciate at a faster rate than average. If you bought a vehicle with a higher depreciation rate, the gap between the loan amount and the vehicle’s value could be significant, making gap insurance a wise choice.
Rolled over negative equity: If you rolled over negative equity from a previous car loan into your new loan, the loan amount may exceed the vehicle’s value, making gap insurance important for protecting against financial loss.
Considering these factors, it’s important to assess your specific financial situation and the potential gap between the loan/lease amount and the vehicle’s value. If you determine that the gap could pose a financial burden, buying gap insurance can provide additional peace of mind and financial protection.
“Gap coverage is essential for drivers of leased vehicles because of the residual value, but also can provide important financial protection for vehicle owners who have long-term loans,” says Mark Friedlander, director of corporate communications of the Insurance Information Institute.
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Keep Reading: Car Insurance for Leased Vehicles: What to Know
How to buy gap insurance in Massachusetts
You can typically purchase gap insurance from car dealerships and insurance companies. The cost of gap insurance varies depending on factors such as the value of the vehicle, the length of the loan or lease, and the insurer. It’s often available as an add-on or endorsement to your existing auto insurance policy.
“While most car dealers offer gap coverage, we strongly recommend consumers only purchase the coverage through their auto insurer versus buying it from the dealer,” says Friedlander. “There is a major cost differential. Don’t let a car dealer talk you into purchasing gap coverage from them.”
Cheapest recent rates in Massachusetts
Drivers using Insurify have found quotes as cheap as $52/mo for liability only and $123/mo for full coverage in Massachusetts.
*Quotes generated for Insurify users within the last 10 days. Last updated on November 21, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from November 21, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
*Quotes generated for Insurify users within the last 10 days. Last updated on November 21, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from November 21, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
Massachusetts gap insurance FAQs
If you’re considering buying gap insurance in Massachusetts, below is a breakdown of some frequently asked questions about this type of policy to help you prepare for this purchase.
Does Massachusetts require gap insurance?
No. Massachusetts doesn’t require gap insurance coverage. Gap insurance is optional in Massachusetts, and it’s up to car owners to decide whether to purchase it.
How do you file a gap insurance claim in Massachusetts?
To file a gap insurance claim in Massachusetts, you typically need to contact your gap insurance company and provide it with the necessary documentation, such as your insurance policy details, proof of the gap amount, and information about the underlying auto insurance claim.[3]
Do you need gap insurance if you have full coverage?
If you want the protection gap insurance provides, you still need it even if you have a full-coverage policy. “Gap insurance is an optional coverage that can be easily added to your auto insurance policy as an endorsement,” says Friedlander. “It is not considered part of a full-coverage policy, which typically includes comprehensive and collision coverages.”
Why is gap insurance more expensive through a dealership?
Car dealerships tend to charge much more than insurance companies for gap insurance, according to Friedlander. This is somewhat understandable, as insurance companies specialize in issuing insurance products and can add an inexpensive gap policy onto a customer’s standard car insurance policy.
Related articles
More cities in Massachusetts
Sources
- III. "What is gap insurance?."
- Commonwealth of Massachusetts. "Basics of Auto Insurance."
- III. "How to file an auto insurance claim."
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Jacqueline DeMarco
During college, Jacqueline DeMarco interned at a retirement plan advisory firm and was tasked with creating a presentation on the importance of financial wellness. During her research into how money can affect our health, relationships and career, Jacqueline realized just how important financial education is. Jacqueline is a contributor for Insurify and has worked with more than a dozen financial brands, including LendingTree, Capital One, Credit Karma, Fundera, Chime, Bankrate, Student Loan Hero, ValuePenguin, SoFi, and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school.
15+ years in content creation
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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