Does USAA Offer Gap Insurance On Vehicles?

The United Services Automobile Association (USAA) offers various auto insurance coverages. USAA doesn’t offer Gap insurance however they offer insurance named Total Loss Protection that provides almost all the facilities of Gap insurance. However, the “Total Loss Protection” is only available for purchase to customers who get an auto loan through USAA.

Key Takeaways

• Gap insurance is a type of insurance that was first established in the North American financial industry
• It is optional car insurance that will help you pay off your auto loan if your car is totaled or stolen
• USAA doesn’t have Gap insurance but they do offer similar products for purchased vehicles
• USAA offers Car Replacement Assistance (CRA) and it can cover the same costs as gap insurance
• You should keep in mind that Gap insurance doesn’t cover quite a few things like vehicle repairs, down payments, financial hardship, rental cars, etc.

What Is Gap Insurance?

Gap stands for Guaranteed Asset Protection and it is a type of protection that was first established in the North American financial industry. Gap insurance usually, protects the borrower if the car is written off due to the remaining difference between the actual cash value of a vehicle and the balance still owed on the financing. It is optional car insurance that will help you pay off your auto loan if your car is totaled or stolen. This type of loan is only available if you are the original owner of the auto loan or leaseholder on a new vehicle. So, the Gap insurance basically helps the owner to pay the gap between the depreciated value of your car and what you still owe on the car.

Important Of Gap Insurance

If you want to buy a new car then many lenders require you to have collision and comprehensive coverage on your car insurance policy till your car is paid off. So, you have to use the Gap insurance in conjunction with collision coverage or comprehensive coverage. For example, if you have to claim a cover then your collision coverage or comprehensive coverage would help you pay your totaled or stolen vehicle up to the depreciated value. This is because, when you drive a new car, its price value depreciates about 20 percent in the first year of ownership. But if you owe more money than the car’s depreciated value then Gap insurance will help you cover the depreciated value.

USAA Gap Insurance

USAA doesn’t have Gap insurance but they do offer similar products for purchased vehicles. If you have a car loan via USAA then you will have the option to buy Total Loss Protection insurance which functions similarly to gap insurance. This insurance will cover the gap between what you owe and your car’s actual cash value (ACV) up to $50,000, including $1,000 of your deductible. Moreover, USAA offers Car Replacement Assistance (CRA) and it can cover the same costs as gap insurance. Car Replacement Assistance is only available if you have either bought a car outright or have an auto loan through USAA or another lender. The main difference between gap insurance and CRA is that CRA will pay 20% more than the ACV of your car regardless of the amount you owe on a vehicle. Moreover, if your car isn’t financed then CRA can play a valuable role in helping you to buy a new vehicle if your car is totaled. The best part is, both the CRA and Total Loss Protection provide a similar service to gap insurance therefore, you don’t have to provide any additional fees for separate gap coverage.

What Does Gap Insurance Cover?

Usually, Gap insurance covers the gap between your vehicle’s value and the balance of your finance agreement. Some Gap insurance might cover the full value of your loan by covering the deductible. Here, the deductible is an amount that the insurance company deducts from any comprehensive insurance or collision insurance payout. So, Gap insurance might be an excellent option to pay off your loans or lease agreement but unfortunately, it doesn’t cover quite a few things that include – 

1. Vehicle repairs

2. Down payments on a new vehicle

3. Rental cars

4. Financial hardship

How Much Is USAA Gap Insurance?

The cost of Gap insurance varies based on where and how you purchase your policy. When you buy insurance, you can incorporate the gap insurance at the same time with a flat premium of around $500–$700. On the other hand, the Total Loss Protection of USAA covers the difference between the value of the vehicle and the balance you owe on the vehicle as well as up to $1,000 of the deductible! However, Total Loss Protection is only available for vehicles that are fewer than seven years old. Moreover, you will get a loan amount of over $5,000 and you have to pay a flat fee of $269.

USAA Auto Insurance Coverages

USAA provides various insurance coverages for the vehicles including liability, comprehensive, and collision insurance. Below is the overview of some of the common USAA auto insurance coverages – 

1. Car Replacement Assistance Coverage: it is also known as “new car replacement coverage.” This coverage pays 20% in addition to the actual cash value of the vehicle if the car is totaled. CRA is not available for leased cars. 

2. Accident Forgiveness: According to this coverage, USAA insurance customers won’t see their rates go up after one at-fault accident. You can either earn or purchase this coverage. If you have had no at-fault accidents for five years and if you are insured with USAA then you will automatically receive this benefit. If you want to buy this coverage then it will cost you an additional 4% in your auto insurance premiums!   

3. Rental Reimbursement: If your vehicle needs a repair then USAA will pay for a rental vehicle. There are three options available to choose from Economy, Standard, Multi-passenger-Truck, or Large SUV. If you choose economy rental then it will cost you around $60 more per year. 

4. Towing And Labor: This coverage will pay the cost of roadside assistance like towing to the nearest repair shop, the cost of gas delivery, a tire change, etc. If you want to include this coverage then it will cost you an additional $18 on yearly auto insurance premiums. 

5. Rideshare Gap Protection: This coverage protects the roadside drivers if they are not able to cover their vehicle via their personal auto insurance policy.

FAQs About Does USAA Offer Gap Insurance On Vehicles

When Does USAA Declare A Vehicle A Total Loss?

There are many reasons USAA might declare vehicles a total loss. For example – 

1. The repair of the vehicle is not economically logical

2. The vehicle is not in a condition to restore to a safe, pre-accident condition  

3. The state laws make USAA declare the vehicle a total loss 

When You Should Opt For Gap Insurance?

Below are some situations, when you should opt for gap insurance – 

1. If you made less than a 20 percent down payment on your vehicle

2. If your auto loan is 60 months or longer

3. If you’re leasing a vehicle, etc.

Do You Get Money Back From Gap Insurance?

Yes, you can get money back from gap insurance if you cancel the contract within 30 days of purchasing the policy. However, you might have to pay the cancelation fees.

Can You Get Gap Insurance On A Used Car?

Usually, USAA doesn’t offer Total Loss Protection coverage for used cars. On the other hand, some vehicle insurer provides gap insurance on a used car but it’s very rare.

How Long Does It Take For Gap Insurance To Pay?

Depending on the insurer, it might take between 5 and 45 days for gap insurance to pay after the claim.

References:

1. https://www.usaa.com/inet/wc/auto-insurance
2. https://www.usaa.com/inet/wc/insurance_auto_coverage

Last Updated on October 27, 2022 by Magalie D.