Complete Guide to State Farm GAP Insurance Coverage
Payoff Protector — State Farm's form of GAP insurance — pays the difference between what you owe and your vehicle's worth. However, Payoff Protector is only available to drivers with a car loan through State Farm Bank.
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Jeffrey Johnson
Insurance Lawyer
Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...
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UPDATED: Mar 30, 2022
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Mar 30, 2022
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- State Farm doesn’t offer traditional GAP insurance
- Payoff Protector is State Farm’s form of GAP coverage, but is only available if you have a State Farm loan
- GAP insurance covers the difference between what you owe on a vehicle and its worth
Though many auto insurance companies offer GAP coverage, State Farm GAP insurance is only available if you have a State Farm car loan. You can also get State Farm Payoff Protector if you don’t have State Farm car insurance.
Lenders typically require GAP coverage on new car loans and leases to protect their investment. GAP insurance pays the difference between what your vehicle is worth and what you still owe.
Drivers can drop GAP coverage once the vehicle is worth more than the loan amount.
Keep reading to learn more about State Farm GAP insurance and other coverage you need.
What is State Farm GAP Insurance?
State Farm is the largest auto insurance company in the country. The company has good insurance reviews and offers various coverage types.
What is GAP insurance for cars, and does State Farm offer it?
Getting auto insurance is a requirement for buying or leasing a new car. In addition, most lenders require Guaranteed Asset Protection — or GAP — coverage with a lease or loan.
While you can get GAP coverage through most insurance companies, State Farm is different. Instead of traditional GAP coverage, State Farm offers Payoff Protector. If your car gets stolen or totaled, Payoff Protector cancels the difference between your loan and the insurance payout.
Traditional GAP coverage is an add-on to your existing auto policy, where your insurer covers your vehicle, no matter where you have a car loan.
State Farm’s Payoff Protector is only available if you have a loan through State Farm Bank, though you can get this coverage if you have auto insurance through another company.
For example, if you buy a car with a State Farm loan and have auto insurance through Geico, you can still get Payoff Protector coverage. However, if you have State Farm insurance and use another bank for a car loan, you can’t add Payoff Protector.
In the simplest terms, your car loan determines Payoff Protection availability, not your car insurance company.
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How does GAP insurance work?
New cars lose value the moment you drive off the lot. As a result, you owe more than the car is worth from the beginning. That’s where GAP insurance comes in.
What does GAP insurance cover? GAP insurance covers the difference between what you owe and your car’s worth if it gets stolen or totaled. However, GAP doesn’t cover damages or bodily injuries in an accident.
Is GAP insurance worth it? Yes, GAP keeps you from paying substantial out-of-pocket costs if you need to replace your vehicle.
For example, say your car loan is $40,000, but your vehicle is only worth $30,000. GAP insurance pays the $10,000 difference, but you pay that difference yourself if you don’t have GAP coverage.
Payoff Protector works the same as traditional GAP insurance. However, Payoff Protector isn’t add-on coverage since it comes standard on all State Farm Bank auto loans.
Additionally, Payoff Protector may be unavailable if you aren’t up-to-date on your loan payments.
What other auto insurance coverage do you need?
In addition to GAP coverage, lenders typically require full coverage car insurance.
What is full coverage auto insurance? Full coverage consists of liability, collision, comprehensive, and other state-required coverage such as personal injury protection and uninsured/underinsured motorist coverage.
Liability covers property damage and bodily injuries to others if you cause an accident but doesn’t cover your vehicle.
Collision insurance covers damage to your vehicle in an accident. If an accident totals your new car, you need collision and GAP insurance to protect you.
On the other hand, comprehensive covers damage unrelated to an accident, such as fire, theft, vandalism, and acts of nature like floods. So, for example, you need comprehensive and GAP coverage to cover someone stealing your new car.
However, full coverage car insurance is more expensive than liability-only coverage since it offers more protection.
This table shows average auto insurance rates based on coverage from top companies, including State Farm.
Company | Average Annual Rate for Low Coverage | Average Annual Rate for Medium Coverage | Average Annual Rate for High Coverage |
---|---|---|---|
Allstate | $4,628.03 | $4,896.81 | $5,139.02 |
American Family | $3,368.49 | $3,544.37 | $3,416.40 |
Farmers | $3,922.47 | $4,166.22 | $4,494.13 |
Geico | $3,001.91 | $3,213.97 | $3,429.14 |
Liberty Mutual | $5,805.75 | $6,058.57 | $6,356.04 |
Nationwide | $3,394.83 | $3,449.80 | $3,505.37 |
Progressive | $3,737.13 | $4,018.46 | $4,350.96 |
State Farm | $3,055.40 | $3,269.80 | $3,454.80 |
Travelers | $4,223.63 | $4,462.02 | $4,619.07 |
USAA | $2,404.11 | $2,539.87 | $2,667.92 |
State Farm full coverage car insurance averages $287 a month. However, remember that rates vary by driver. So if you have accidents, tickets, or DUIs, expect those rates to be higher.
How can you save on full coverage auto insurance?
Though more coverage costs more, there are ways to get the cheapest full coverage auto insurance from State Farm or other insurance companies.
First, take advantage of discounts. A variety of factors determine discounts, such as your vehicle and policy. Most drives are eligible for multiple discounts, so bundle them for the most savings.
This table shows auto insurance discounts from State Farm and other top companies. The discount amount is listed if it’s available.
Auto Insurance Discounts | Allstate (%) | American Family (%) | Farmers (%) | Geico (%) | Liberty Mutual (%) | Nationwide (%) | Progressive (%) | State Farm (%) | Travelers (%) | USAA (%) |
---|---|---|---|---|---|---|---|---|---|---|
Adaptive Cruise Control | N/A | N/A | N/A | N/A | 5 | x | x | N/A | N/A | N/A |
Adaptive Headlights | N/A | N/A | x | N/A | 5 | x | x | N/A | N/A | N/A |
Anti-Lock Brakes | x | x | x | 5 | 5 | 5 | x | 5 | x | x |
Anti-Theft | x | x | x | 25 | 20 | 25 | x | 15 | x | x |
Claim Free | x | x | x | 26 | x | 10 | x | 15 | 23 | 12 |
Continuous Coverage | x | x | x | x | N/A | N/A | x | N/A | 15 | N/A |
Daytime Running Lights | x | x | x | 1 | 5 | 5 | x | N/A | x | x |
Defensive Driver | x | x | x | x | 10 | 5 | 10 | 5 | 10 | 3 |
Distant Student | x | x | x | x | N/A | 10 | x | x | 7 | x |
Driver's Ed | x | x | x | x | 10 | N/A | 10 | 15 | 8 | 3 |
Driving Device/App | x | x | N/A | x | 30 | 40 | 20 | 50 | 30 | 5 |
Early Signing | x | x | x | x | N/A | 8 | x | N/A | 10 | 12 |
Electronic Stability Control | x | x | x | N/A | 5 | x | x | N/A | N/A | N/A |
Emergency Deployment | N/A | N/A | N/A | 25 | N/A | N/A | N/A | N/A | N/A | N/A |
Engaged Couple | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Family Legacy | N/A | x | N/A | x | N/A | N/A | x | N/A | N/A | 10 |
Family Plan | N/A | x | x | N/A | N/A | 25 | N/A | N/A | N/A | N/A |
Farm Vehicle | x | N/A | x | x | N/A | N/A | N/A | N/A | N/A | N/A |
Fast 5 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Federal Employee | N/A | N/A | x | 8 | 10 | N/A | N/A | N/A | N/A | N/A |
Forward Collision Warning | N/A | N/A | N/A | N/A | 5 | x | x | N/A | N/A | N/A |
Full Payment | N/A | x | x | x | $5 | N/A | x | N/A | 7.5 | N/A |
Further Education | N/A | N/A | N/A | x | 10 | 15 | N/A | N/A | x | N/A |
Garaging/Storing | N/A | N/A | x | N/A | N/A | N/A | N/A | N/A | x | 90 |
Good Credit | x | x | N/A | N/A | N/A | x | x | x | N/A | N/A |
Good Student | x | x | x | 15 | 22.5 | 10 | x | 25 | 8 | 3 |
Green Vehicle | x | N/A | 5 | N/A | 10 | N/A | N/A | N/A | 10 | N/A |
Homeowner | N/A | N/A | x | x | x | 5 | x | 3 | 5 | N/A |
Lane Departure Warning | N/A | N/A | N/A | N/A | x | x | x | N/A | N/A | N/A |
Life Insurance | x | N/A | N/A | N/A | N/A | x | N/A | N/A | N/A | N/A |
Low Mileage | x | x | x | x | x | x | x | 30 | x | x |
Loyalty | N/A | x | N/A | x | N/A | 5 | x | N/A | N/A | x |
Married | N/A | N/A | N/A | N/A | x | x | x | x | N/A | x |
Membership/Group | N/A | N/A | N/A | x | 10 | 7 | N/A | N/A | x | N/A |
Military | x | N/A | x | 15 | 4 | N/A | N/A | x | N/A | x |
Military Garaging | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 15 |
Multiple Drivers | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Multiple Policies | 10 | 29 | x | 10 | 20 | 10 | 12 | 17 | 13 | x |
Multiple Vehicles | x | x | x | 25 | 10 | 20 | 10 | 20 | 8 | x |
New Address | N/A | N/A | N/A | N/A | 5 | N/A | N/A | N/A | N/A | N/A |
New Customer/New Plan | N/A | N/A | N/A | N/A | x | N/A | N/A | N/A | N/A | N/A |
New Graduate | N/A | N/A | N/A | N/A | 5 | N/A | N/A | N/A | N/A | N/A |
Newer Vehicle | x | N/A | x | x | N/A | x | x | 40 | 10 | 12 |
Newly Licensed | N/A | N/A | N/A | N/A | 5 | N/A | N/A | N/A | N/A | N/A |
Newlyweds | N/A | N/A | N/A | N/A | 5 | N/A | N/A | N/A | N/A | N/A |
Non-Smoker/Non-Drinker | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Occasional Operator | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | x |
Occupation | x | N/A | x | x | 10 | 15 | N/A | N/A | x | N/A |
On-Time Payments | x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 15 | N/A |
Online Shopper | N/A | N/A | N/A | N/A | N/A | N/A | 7 | N/A | N/A | N/A |
Paperless Documents | x | x | x | N/A | N/A | 5 | $50 | N/A | N/A | N/A |
Paperless/Auto Billing | x | x | x | N/A | x | $30 | x | $2 | 3 | 3 |
Passive Restraint | x | x | x | 40 | x | 20 | x | 40 | x | x |
Recent Retirees | N/A | N/A | N/A | N/A | 4 | N/A | N/A | N/A | N/A | N/A |
Renter | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Roadside Assistance | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Safe Driver | N/A | N/A | x | 15 | N/A | 35 | 31 | 15 | 23 | 12 |
Seat Belt Use | N/A | N/A | N/A | 15 | N/A | N/A | N/A | N/A | N/A | N/A |
Senior Driver | x | N/A | x | N/A | N/A | N/A | N/A | N/A | N/A | x |
Stable Residence | N/A | N/A | N/A | N/A | N/A | x | x | N/A | N/A | N/A |
Students & Alumni | N/A | x | N/A | x | 10 | 7 | N/A | N/A | N/A | N/A |
Switching Provider | N/A | x | x | N/A | 10 | N/A | x | N/A | N/A | N/A |
Utility Vehicle | x | N/A | x | x | N/A | N/A | N/A | N/A | N/A | N/A |
Vehicle Recovery | x | x | x | 15 | 35 | 25 | x | 5 | x | x |
VIN Etching | N/A | N/A | x | N/A | 5 | x | x | N/A | x | x |
Volunteer | N/A | x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Young Driver | N/A | N/A | N/A | N/A | x | N/A | x | N/A | N/A | $75 |
Next, carefully look at your policy. Drop extra coverage like roadside assistance to lower rates. Raising your deductibles also lowers rates. However, a higher deductible means more out-of-pocket costs if you file a claim.
Finally, shop around for cheap full coverage insurance. Since Payout Protector is available regardless of your insurance company, compare multiple companies to find the best deal if you have a State Farm Bank loan.
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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State Farm GAP Insurance: The Bottom Line
State Farm doesn’t offer traditional GAP insurance. Instead, State Farm Bank adds Payoff Protector to its car loans. Drivers with State Farm insurance are ineligible for Payoff Protector unless they have a loan through State Farm Bank.
GAP coverage pays the difference between a car’s value and what you owe. You may pay out-of-pocket for a totaled or stolen car without GAP coverage.
Most lenders require GAP coverage and full coverage auto insurance. So add discounts and adjust your policy to get low full coverage auto insurance rates.
Shop around to find the lowest full coverage rates. Compare multiple companies to find the coverage you need with the lowest rates.
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Jeffrey Johnson
Insurance Lawyer
Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...
Insurance Lawyer
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.