How Does Gap Insurance Work for Snowbirds?

If you are a snowbird, you know the joy of escaping the cold northern winters by spending months in a warmer location. Snowbirds are typically retirees who have the freedom to travel and spend extended periods in places such as Florida, Arizona, or California. However, there are some things you need to consider when it comes to your car insurance, especially gap insurance.

Gap insurance, also known as "guaranteed asset protection," is an optional type of insurance that covers the difference between the amount you owe on a car loan and the car's actual cash value in case of an accident or theft. If you have a car loan, you may owe more than the car's value, putting you at risk of financial loss.

As a snowbird, you may have a car registered in one state and use it in another state for an extended period. This can affect your insurance coverage, including gap insurance. Here is what you need to know about how gap insurance works for snowbirds.

Gap Insurance Coverage

Gap insurance is designed to protect you if your car is totaled or stolen and the insurance payout is less than what you owe on your car loan. The coverage applies to the difference between your car's actual cash value (ACV) and the outstanding balance on your loan. In other words, if you have a loan balance of $20,000 and your car's ACV is $15,000, gap insurance will cover the $5,000 difference.

It is important to note that gap insurance is not designed to cover your car's depreciation, regular wear and tear, or mechanical breakdowns. Additionally, gap insurance is usually only available for new and leased cars; it may not be available for used cars or cars with a loan term longer than 5 years.

Gap Insurance and Snowbirds

Snowbirds who spend extended periods of time in another state or country may need to adjust their car insurance coverage, including gap insurance. Here are some things to consider:

State-Specific Insurance Requirements

Each state has its own insurance requirements, including minimum liability coverage, personal injury protection, and uninsured motorist coverage. If you are a snowbird spending time in another state, you may be required to carry insurance coverage that meets that state's requirements. Make sure to check with your insurance company to ensure that you have the right coverage.

Insurance Discounts

Snowbirds who spend several months in another state may be able to get insurance discounts. For example, if you spend more than 30 days in Florida, you may be eligible for a discount on your car insurance. Make sure to ask your insurance company about available discounts.

Gap Insurance Coverage

If you have gap insurance on your car loan, you need to make sure that the coverage applies to the state where you are spending time as a snowbird. Some gap insurance policies may only apply to the state where the car is registered. You may need to purchase additional gap insurance coverage if you are spending time in another state.

Car Storage

If you are leaving your car in another state while you return home for the summer, you may be able to reduce your insurance coverage. For example, you may be able to drop your liability coverage and keep your comprehensive and collision coverage while your car is in storage. Make sure to check with your insurance company about your options.


Gap insurance is an important type of insurance that can protect you from financial loss in case of an accident or theft. As a snowbird, you need to make sure that your gap insurance coverage is appropriate for the state where you are spending time. Make sure to check with your insurance company to ensure that you have the right coverage, and ask about available discounts. By taking the time to understand your insurance coverage, you can enjoy your time as a snowbird without worrying about your car.