Gap Insurance in Michigan (2024)
You can buy gap insurance from an insurance company, car dealer, or credit union in Michigan.
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Written byMelanie Lockert
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10+ years writing on personal finance topics
Host of the Mental Health and Wealth podcast
Melanie is a blogger, author, and speaker specializing in personal finance and debt management. She’s also the author of the blog and book “Dear Debt.”
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Edited byKatie Powers
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Licensed auto and home insurance agent
3+ years experience in insurance and personal finance editing
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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Updated October 30, 2024
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Table of contents
In the event of total vehicle loss, severe damage, or theft, gap insurance covers the difference between the value of your car and the remaining amount you owe on your car loan.[1] It’s smart to invest in gap insurance if you have a car loan or lease your vehicle.[2] The national average cost of full coverage in Michigan is $309 per month. Adding gap insurance to your policy typically costs an additional $2 per month.
Though Michigan has the most expensive car insurance rates in the U.S., you shouldn’t try to save money on insurance by skipping this optional coverage type. Comparing car insurance rates from multiple companies can help you find affordable coverage.
Here’s what you need to know about gap insurance in Michigan.
Quick Facts
Auto lenders don’t typically require drivers to purchase gap insurance.
Gap insurance pays out after collision and comprehensive coverage.
Most cars depreciate in value by 20% within a year, which means you can owe more on your car loan than the value of your car.
How gap insurance works
Also sometimes referred to as guaranteed asset protection, guaranteed auto protection, or loan/lease coverage, gap insurance is optional coverage. It pays the difference between your vehicle’s actual cash value (ACV) and your car loan balance if someone steals your car or you total it.
For example, if an auto accident totals your vehicle, your insurer may cover the current worth of your vehicle (minus your insurance deductible) with collision insurance.[3] But the ACV of your vehicle may cost less than what you still owe on your auto loan.
Your new car will likely depreciate in value by 20% during the first year you own it, according to the Insurance Information Institute. Since vehicles depreciate rather quickly, gap insurance can provide financial protection if you’ve financed or leased your vehicle. Buying gap insurance helps you avoid making out-of-pocket payments for a total loss or stolen vehicle.
What gap insurance covers in Michigan
Gap insurance can cover the cost difference between the ACV of your vehicle and the remaining auto loan or lease balance. It’s a supplemental coverage that works alongside collision and comprehensive coverage in the event of auto theft or a vehicle-totaling accident. It doesn’t cover partial vehicle damage, routine maintenance, or missed car payments.
Here’s an example to demonstrate how the coverage works. In this scenario, you have $30,000 left on your auto loan, the ACV of your car is $25,000, and your comprehensive coverage deductible is $500.
If someone steals your car, your comprehensive policy payout is $24,500, which is the ACV of your vehicle minus your deductible. You still owe $5,500 on your auto loan. If you have a gap insurance policy, it can cover this remaining balance so you don’t have to deal with a financial loss.
You should know that gap insurance coverage may have maximum claim benefits and loan term limits. Read the terms and conditions of your car insurance policy to understand the reach of your coverage.
Keep in Mind
When you lease or finance a vehicle, the insurance payout from a total loss will go to pay the leasing company or lender — not in your pocket.
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Best gap insurance companies in Michigan
Many car insurance companies offer gap insurance, but some don’t. For example, State Farm and GEICO — two of the nation’s largest auto insurers — don’t offer gap insurance. Make sure you check with your current insurer to see whether it provides it.
Here are three of the best car insurance companies offering gap insurance for Michigan drivers.
Auto-Owners
| 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. | 8.5 /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. | $63/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. | $112/mo |
4.0
Best choiceBased on 137 verified guest reviews and ratings
How drivers feel about Auto-Owners
Drivers appreciate the friendly customer service, competitive initial rates, and professional agents but dislike the frequent price increases and complicated claims process.
AI-generated from the text of verified reviews collected by Insurify
Best For
Cheap rates
Senior drivers
Ample discounts
How drivers feel about Auto-Owners
Drivers appreciate the friendly customer service, competitive initial rates, and professional agents but dislike the frequent price increases and complicated claims process.
AI-generated from the text of verified reviews collected by Insurify
Best For
Cheap rates
Senior drivers
Ample discounts
Reviews (86)
Ronald W
October 29, 2024
Verified Review
They Cancelled Our Home Insurance
We had no problem with Auto-Owners regarding our auto insurance. However, we were disappointed when Auto-Owners cancelled our home insurance. They stopped all home insurance in 'fire prone areas'.
Martha
October 28, 2024
Verified Review
Good
The premiums keep increasing.
Lawrence
October 24, 2024
Verified Review
Honest Answers to Questions
Please refer to my answers to the previous questions.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
834NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.5A.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
Auto-Owners provides loan or lease gap coverage in Michigan. The company offers affordable average liability and full-coverage rates in Michigan. Additionally, Auto-Owners policyholders can save money through numerous available discounts.
Pros
High customer satisfaction
Multiple discounts
Cons
Can’t get an online quote
Must file a claim directly with an agent
Travelers
| User Reviews | 4.7 |
|---|---|
| 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. | 9.0 /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. | $151/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. | $268/mo |
4.7
Best choiceBased on 745 verified guest reviews and ratings
How drivers feel about Travelers
Drivers appreciate the lowest prices, excellent service, and responsive call centers but dislike the rising premiums and poor claims handling.
AI-generated from the text of verified reviews collected by Insurify
Best For
Numerous discounts
Gap insurance
Rideshare coverage
How drivers feel about Travelers
Drivers appreciate the lowest prices, excellent service, and responsive call centers but dislike the rising premiums and poor claims handling.
AI-generated from the text of verified reviews collected by Insurify
Best For
Numerous discounts
Gap insurance
Rideshare coverage
Reviews (381)
Vicki
October 27, 2024
Verified Review
Good but Costly
I had a great experience with Travelers and would still be with them, but I got a better rate with another company.
Nancy
October 23, 2024
Verified Review
Not Great by Any Means
Be careful when you submit a claim! They actually owe me $1,000 from five years ago and I still haven't received it.
Birdie
October 21, 2024
Verified Review
Expensive
I've never needed any claims for over 40 years, have no tickets, and an excellent credit score, yet my rates increased by 50%.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
818NAIC 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
Travelers offers gap insurance in Michigan and is a good option for drivers with incidents on their driving record. The company offers a number of unique discounts policyholders can benefit from, including discounts for homeowners, students, and owners of electric or hybrid vehicles.
Pros
Accident forgiveness available
Robust coverage selections and discount offerings
Cons
Rideshare coverage only available in Colorado and Illinois
High number of negative customer reviews with the Better Business Bureau
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. | $138/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. | $254/mo |
3.7
A solid optionBased on 2641 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 (1,541)
Frank
October 29, 2024
Verified Review
Been with them for 27 years, but I'm unsure
They are expensive. We are low mileage drivers with three cars, and only my wife and I are driving.
Gary
October 29, 2024
Verified Review
Price Gouging!
They recently increased my premium from $182 to $231 per month for no apparent reason, other than a general raise for everyone.
Donald
October 29, 2024
Verified Review
Don't use them, they will increase your rate within the six-month period of your term! And that's with no claims!
Don't use them, they will increase your rate within the six-month period of your term! And that's with no claims!
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
807NAIC 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 provides gap insurance and a range of other auto insurance products in Michigan, including original parts replacement coverage, lifetime repair guarantee, roadside assistance, and more. The company has discount opportunities for teachers and families.
Pros
Wide range of available discounts
Accident forgiveness available
Cons
Many negative reviews and customer complaints
Premiums are relatively high compared to industry average
Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page.
The car insurance data includes coverage analysis and details on drivers’ vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums. The data included on this page represent averages across driver ages, genders, credit scores, and driver profiles for Michigan drivers.
Gap insurance vs. full coverage
A full-coverage policy in Michigan generally includes a combination of coverages to keep you protected, including liability, collision, and comprehensive insurance. Michigan requires drivers to carry a minimum amount of bodily injury and property damage liability insurance to cover the costs of the other driver’s medical bills and vehicle damage in the event of an accident.
Collision coverage kicks in to cover your vehicle damages after an accident, and comprehensive insurance pays for repairs caused by vandalism, severe weather, and other qualifying events. Though full-coverage insurance provides a range of protections for Michigan drivers, it doesn’t include gap insurance. But the two optional coverages do work well together.
Not everyone with full-coverage insurance needs gap insurance, but it’s a good idea for drivers financing or leasing a vehicle worth less than their auto loan balance.
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Cheapest recent rates in Michigan
Recent Michigan car insurance prices for Hyundai, Chevrolet, Subaru , and more.
*Quotes generated for Insurify users within the last 10 days. Last updated on October 30, 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 October 30, 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 October 30, 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 October 30, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
Who needs gap insurance in Michigan?
Michigan law doesn’t require gap insurance, but your lender or financial institution might include it as a requirement in your contract. Even if it doesn’t, it’s typically a smart move to consider gap insurance if you’ve financed or leased your vehicle.
You should consider gap insurance if any of the following statements apply to you:
Your auto loan lender requires it.
You have a repayment term of 60 months or more.
You put no or a low down payment (such as 20% or less) on your vehicle.
You’re currently leasing a vehicle.
You have a high interest rate on your auto loan.
You have a luxury or electric vehicle that may depreciate faster than standard vehicles.
You have negative equity from your previous auto loan rolled into your new one.
“It’s not uncommon for the value of a vehicle to depreciate quickly, especially with new vehicles,” says Zack Fortman, personal lines insurance agent and office manager at Fortman Insurance Services. “When this happens, there could be a gap between the vehicle value and loan amount.”
If the current balance on your auto loan exceeds the actual cash value of your vehicle, you should purchase gap insurance. But you may not need gap insurance if the difference between your auto loan balance and the car’s actual cash value is small or if you can comfortably afford any gaps between the insurance payout and your auto loan.
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Read More: How Much Will Insurance Pay for My Totaled Car?
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How to buy gap insurance in Michigan
If you’re buying a new vehicle, the car dealership might offer you gap insurance during the purchase. Though this is convenient, you typically can find more cost-effective options. In Michigan, you can purchase gap insurance from an auto insurance company or your lender. Not all auto insurers offer it, so you should check with your current insurer.
If you get gap insurance through a car insurance company, you can typically add it to your current policy. For example, if you have collision and comprehensive coverage, you can add gap insurance with the same insurance company. Some auto insurers may offer stand-alone gap insurance policies, though this is less common.
Another potential way to get gap insurance in Michigan is through your auto loan lender, which is typically a bank, credit union, or other financial lender. For example, Michigan First Credit Union offers auto loans and gap insurance coverage. To qualify for credit union products, you typically need to become a member and meet certain eligibility requirements.
Gap insurance in Michigan FAQs
The following information should help answer your remaining questions about finding gap insurance in Michigan.
Does Michigan require gap insurance?
No. Michigan doesn’t require drivers to obtain gap insurance. The state only requires drivers to purchase liability and personal injury protection (PIP) coverage.[4]
Why is gap insurance a good idea?
Gap insurance is a good idea for Michigan drivers financing or leasing a new vehicle. If you experience total vehicle loss, gap insurance covers the financial gap between your comprehensive or collision insurance payout and the remaining amount you owe on your auto loan.
How can you purchase gap insurance in Michigan?
You can purchase gap insurance in Michigan from an insurance company or credit union that offers this type of coverage. If you’re buying a new car, your dealership may also offer you this type of coverage. You can compare the best rates and find gap insurance that meets your needs.
What are some companies that offer gap insurance in Michigan?
If you’re looking for gap insurance in Michigan, you can check out insurance companies like Auto-Owners, Travelers, and Liberty Mutual. Compare prices and review multiple options.
Related articles
More cities in Michigan
Sources
- Consumer Financial Protection Bureau. "What is Guaranteed Auto Protection (GAP) insurance?."
- Insurance Information Institute. "What is gap insurance?."
- Insurance Information Institute. "Auto insurance basics—understanding your coverage."
- Michigan Department of Insurance and Financial Services. "What auto insurance coverage do I have to purchase?."
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Melanie Lockert
Melanie Lockert is the founder of the blog and author of the book, "Dear Debt." Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Allure, Business Insider, Credit Karma, Fortune, and more. She is also the co-founder of the Lola Retreat and host of the Mental Health and Wealth show podcast. She lives in Los Angeles and enjoys jazz music, traveling, coffee, and spending time with her two cats and partner.
Licensed auto and home insurance agent
3+ years experience in insurance and personal finance editing
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
Featured in
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