New Coverage Offering From Progressive Prevents "GAPS" in Your Auto Insurance
Company is First Auto Insurer to Offer Loan/Lease Payoff Coverage in Texas
MAYFIELD VILLAGE, Ohio — March 5, 2002 —If your insurance company declared your vehicle a total loss, would there be a gap between what you would receive as payment for the "actual cash value" of your vehicle and what you owe your bank or leasing company? There might be. Coverage for such occurrences is called "gap" or "loan/lease payoff" insurance and, effective today, it's available to Texans from one of the largest auto insurance companies in the country, Progressive (NYSE: PGR).
Progressive today announced that it has become the first auto insurance company approved by the Texas Department of Insurance to offer loan/lease payoff coverage to policyholders in the state. Commonly referred to as gap coverage, it pays the difference between what you owe on your vehicle and what the comprehensive or collision coverage pays when the vehicle is either declared a total loss, or stolen and not recovered. The rates for this coverage are very competitive when compared to the rates a consumer can get when purchasing the coverage from an auto dealer.
Because Texas auto insurance contracts provide for the payment of a vehicle's actual cash value (ACV) when it is declared a total loss, gap coverage is valuable if you have an outstanding loan or lease balance that is greater than your vehicle's ACV. According to a recent online survey of over 400 consumers on progressive.com, about 58 percent of respondents said they have an outstanding loan or lease on the vehicle they drive most often.
Depending on the amount and terms of your lease or loan, you may have to pay hundreds — even thousands — of dollars out of your own pocket to cover the gap between the ACV and the cost to replace your vehicle. But with gap coverage, you're protected. The coverage pays for the difference — up to 25 percent of the vehicle's ACV — as well as the deductible.
"For those who finance or lease their vehicle, purchasing gap coverage can be a great way to make sure they're fully covered in case of a total loss," said Jonathan Klein, Texas product manager for Progressive. "It provides drivers with peace of mind that they won't have to pay thousands of dollars out of their own pocket to pay off a loan and replace a vehicle if it's damaged beyond repair or stolen. For those consumers who are wondering if the coverage is right for them, Progressive suggests that they contact their independent insurance agent, or call us at 1-800-PROGRESSIVESM."
With the addition of Texas, Progressive now sells gap coverage in 46 of the 48 states where it sells auto insurance. You can purchase the coverage either through your independent insurance agent, or directly from the company. The coverage is available to Progressive policyholders for passenger vehicles that are leased or financed, as long as the lien holder or lessor is a financial institution. Additionally, you must carry comprehensive or collision coverage for the vehicle. You can purchase the coverage with a new policy, or when the policy is renewed if you're an existing customer.
For more information on loan/lease payoff coverage — including links to sites that can help you determine the actual cash value of a vehicle, go to http://www.progressive.com/shop/loanlease.asp.
Progressive (NYSE: PGR), with headquarters in Mayfield Village, Ohio, is the nation's fourth largest auto insurance company. In business since 1937, the company provides all drivers with competitive rates and 24-hour, in-person and online services. The company sells its products over the phone at 1-800-PROGRESSIVESM , online at progressive.com, and through more than 30,000 independent agencies throughout the U.S. More information about the company can be found at progressive.com.
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