Customize Your Policy

Gap Insurance

Did you know that most new cars lose 20 percent of their value within a year of purchase? If you lease or finance a new car, depending on the size of your deposit and the terms of your agreement, the amount of your loan may be more than the market value of your vehicle.

Gap insurance is an optional coverage, referred to as the Auto Loan/Lease Coverage Endorsement, available to NJM Auto policyholders.§ This endorsement will pay for some or all of the difference between the balance of a loan or lease on a vehicle and what NJM pays if the car is considered a covered total loss. It does not pay for deductibles, carry-over balances from prior loans or leases, missed payments, or late fees. This protection cannot be added more than 30 days after you add the car to your policy.

You might want to consider gap insurance for a new car or truck if you:

  • Made a down payment of less than 20 percent
  • Financed for 60 months or longer
  • Leased the vehicle (carrying gap insurance is generally required for a lease)
  • Purchased a vehicle that depreciates faster than average

    § Applies to New Jersey policies issued or renewed after 6/1/19 and Pennsylvania policies issued 1/1/18 and later.

    † For NJ policies, percentage savings based on a comparison of the average NJM premium with the average statewide premium as reported by the NJ Department of Banking and Insurance. For PA policies, percentage savings based on average annual savings of customers with policies in force on 10/31/19 who reported their prior auto insurance premiums and switched to NJM.

    The information and descriptions of coverage on this site are general in nature. The coverage afforded for a particular loss depends on the specific facts and the terms, exclusions, and limits of the actual policy. Nothing on this site alters the terms or conditions of any policy; the policy controls coverage. Coverage options, limits, discounts, deductibles, and other features are subject to underwriting criteria, state availability, and effective dates. Coverage provided and underwritten by NJM Insurance Company and its subsidiaries, 301 Sullivan Way, W. Trenton, NJ 08628.