Commercial Auto Insurance
What kind of work do you do?
Commercial delivery vans in row.
Choose from the nation's best insurance providers
Logos of Insureon's business insurance carrier partners

What is lease gap insurance coverage?

Lease gap insurance, also known as loan gap coverage, is an endorsement to your commercial auto insurance that covers the total loss of a leased or financed vehicle.

How does gap insurance work?

Gap insurance is optional coverage you can add to your commercial auto insurance policy. It offers financial protection in case a vehicle you still owe money on is stolen or damaged beyond repair.

A gap insurance policy covers the difference between the depreciation value of your vehicle (what your car insurance pays you) and what you owe on your lease agreement or loan balance if your car is wrecked or stolen.

Imagine the financial hit you would face if someone stole your business vehicle that had an outstanding loan of $50,000 and your car’s actual cash value (also known as the depreciated value) was $40,000. You would be responsible for paying off the $10,000 difference on the loan, as well as your deductible.

With gap insurance, your auto insurance company would cover the difference and you would only have to pay the deductible.

It works the same way with lease gap coverage. If your leased car was wrecked or stolen, your insurance provider would cover the remaining lease payments.

Get commercial auto insurance quotes from trusted U.S. carriers 

How do I get lease gap coverage?

Insurance gap coverage, which is also referred to as auto loan coverage, is only available for new vehicles and must be purchased by the vehicle’s loan holder or leaseholder. It is typically acquired as an add-on to your comprehensive coverage or collision coverage, so you would also need one or both policies in order to get this coverage.

What is collision coverage?

Collision insurance coverage is typically required for vehicles with auto leases and loans. It insures a vehicle against damage from an accidental collision with other vehicles and objects.

What is full coverage auto insurance?

Comprehensive auto insurance is an optional coverage that insures against theft, vandalism, floods, deer collisions, and falling tree limbs.

Even if your car insurance policy includes collision and comprehensive coverage for the full value of your car, your reimbursement check from the insurance company would still deduct for the depreciated value of the vehicle.

What is the difference between gap insurance and commercial auto insurance?

Commercial auto insurance covers all the vehicles your business owns. It’s similar to personal auto insurance in that it covers your vehicles for specific risks.

Gap insurance is a policy option you can add to your car insurance coverage for newer vehicles that you lease or finance through a loan. Think of it as insurance coverage for the difference between your vehicle’s actual cash value (ACV) and what you still owe your lender or leasing agency.

You may also like
Man in a sport coat driving
Commercial auto vs. personal auto insurance

The line between a personal vehicle and a commercial vehicle is sometimes unclear. Find out which types of auto insurance cover vehicles used for work.

Who should get a gap insurance endorsement?

Gap insurance is often required to obtain a car loan or lease. Even when it’s not required, it is still worth considering adding to your policy the next time you buy or lease a new vehicle. Imagine the financial impact if you had to repair or replace a stolen or damaged car that still had an expensive loan or lease to pay off.

The Insurance Information Institute reports that a new car loses 15 to 20 percent of its value just by driving off the car dealership lot – including your newly purchased or leased vehicle.

That’s why the Institute says gap insurance should be considered for a new car or truck if the buyer:

  • Made a down payment of less than 20% of a vehicle’s purchase price
  • Financed a loan for 60 months or longer
  • Leased a new vehicle
  • Purchased a vehicle that depreciates faster than other vehicles
  • Transferred the balance of an existing car loan onto a new car loan

Find commercial auto insurance quotes with Insureon

Complete Insureon’s easy online application today to get insurance quotes from top-rated U.S. carriers. You can also consult with an insurance agent on your business insurance needs. Once you find the right types of policies for your small business, you can begin coverage in less than 24 hours.

What our customers are saying
Updated: February 20, 2024
Get commercial auto insurance quotes
Save money by comparing car insurance quotes from top carriers.
How much does commercial auto insurance cost?How do I get commercial auto insurance?How are car insurance premiums calculated?What is any auto liability coverage?What is drive other car insurance?Best commercial auto insurance for small businesses