Best Cheap Gap Insurance Companies in Rhode Island: Quotes, Discounts (2023)

It doesn’t take much more than an hour to drive from one corner of Rhode Island to the other. But every Rhode Island driver still needs auto insurance. Read on to learn about gap insurance for cars with loans or leases. And whatever insurance policy you’re buying, use Insurify to discover the insurance companies that have the best deals—in Providence or anywhere else.

See More: Compare Car Insurance

Best Companies for Gap Insurance in Rhode Island

Which auto insurance companies provide the best gap insurance policies in the Ocean State? These companies gave Insurify the cheapest car insurance quotes for full-coverage Rhode Island car insurance for leased vehicles, which are the most likely to need gap insurance. Progressive, Allstate, and GEICO are other big names offering great auto insurance rates.

See More: Cheap Car Insurance in Rhode Island

What is gap insurance?

Gap insurance only applies to drivers who have an auto loan or lease. Depending on the terms of your loan and your car’s value, your lender might require you to have gap insurance. Car insurance companies sell gap insurance, and banks, dealerships, and credit unions sell “gap waivers”—they’re the same thing, but often, you’ll be better off with an insurance company.

Here’s when you need gap insurance: as soon as you drive your car off the lot, it starts to lose value, often about 20 percent in its first year. Unless you made a big down payment and got a tight loan term, you’re not going to pay the loan at that pace. So for a time, you’ll be “underwater”: you’ll owe more on the car than it’s actually worth. Gap insurance covers the difference.

Who should buy gap insurance in Rhode Island?

Since you’re driving a pretty new car and have a loan or a lease, your auto insurance is going to be a full-coverage policy—as in, it will include comprehensive coverage and collision coverage. This means that, in the event of a total loss like your car being stolen or irreparably damaged in a collision, you’ll get a full reimbursement for the actual cash value of the car.

But what if your car’s cash value—minus your policy’s deductible—isn’t enough to pay off the loan? This is when your auto insurance coverage needs to include gap insurance. “Gap” stands for “guaranteed asset protection” because it ensures that the financial institution will get all the money for their loan back. And you won’t have to pay off the full loan on a totaled car!

Consider gap insurance if:

• Your lender requires it.

• You’re leasing your vehicle.

• You financed your vehicle loan over 60 months or more.

• You put less than 20 percent down on your car (or didn’t make a down payment at all).

• Your loan has a high interest rate.

• You rolled over negative equity from your last auto loan.

• You’re driving a luxury vehicle or other high-value vehicle that depreciates faster than a standard car.

Rhode Island Gap Insurance Laws

Rhode Island law has no gap insurance requirements. The Ocean State has state minimum insurance requirements for liability insurance, but that’s it. Minimum coverage for Rhode Island car insurance includes $25,000 in bodily injury liability per person and $50,000 per accident, along with $25,000 per accident in property damage liability.

Even though gap insurance is additional coverage not required by the state of Rhode Island, your lender will likely require you to have it, and you’ll at least need a full-coverage insurance policy that includes comprehensive coverage and collision coverage. Optional for Rhode Island drivers: medical payments and uninsured/underinsured motorist coverage.

How much gap insurance do I need in Rhode Island?

When you buy gap insurance, it will sometimes be limited to a certain percentage of your car’s cash value. Some only cover 25 percent of your car’s value; others go to 50 percent. Have a conversation with your insurance agent or lender about the status of your loan and how far underwater your auto loan is actually going to be.

See More: How Much Car Insurance Do I Need?

How Gap Insurance Works in Rhode Island

When your lender or auto dealership tries to sell you a gap waiver, definitely take a breather and have a look at what insurance companies in your area are offering. You’ll almost always get a better deal with them. Gap insurance is additional coverage to your insurance policy, and often, insurance companies add it to your normal auto insurance policy for a small percentage of your premium.

How Much Gap Insurance Costs in Rhode Island

Yikes! Full-coverage auto insurance in Rhode Island for a leased car costs about $347 monthly on average. For a tightly packed state close to lots of metro areas, this makes sense. But it’s significantly more expensive than the nationwide average for a full-coverage auto insurance policy on leased vehicles, which is just $289.

See More: Average Cost of Car Insurance in Rhode Island

How to Buy Gap Insurance in Rhode Island

When you buy gap insurance in Rhode Island, the lender on your new or leased car is going to try to get you to buy a gap waiver first. But it’s likely that auto insurance companies will cover your loan for cheaper. All Rhode Island drivers should shop around for the best car insurance quotes, especially if you have a valuable car. The best place to do that? Insurify.

Insurify allows you to compare quotes from top insurance companies all at your fingertips. Just answer a few demographic questions and you’ll be presented with the best and cheapest quotes.

Frequently Asked Questions: Gap Insurance in Rhode Island