Bank of America Auto Loan Gap Insurance: What You Need to Know

What Is Gap Insurance?

Gap insurance covers the difference between the actual cash value of your car and the remaining balance on your loan if the vehicle is totaled or stolen. It protects you from paying a large balance when the car's market value has fallen below the loan amount.

Bank of America's Gap Insurance Offer

Bank of America (BofA) partners with third‑party providers to offer gap coverage to auto loan customers. The insurance is available at the time of loan application and can be added to the monthly payment.

Eligibility Criteria

• Must be a BofA auto loan customer.
• Vehicle must be a new or used car with a loan balance that exceeds the vehicle's current market value.
• Coverage can be selected for the first 12 months of the loan.

Coverage Limits

• Maximum coverage of $10,000 per claim.
• Does not cover liability, collision, or comprehensive claims.

How Much Does It Cost?

The premium is typically 0.3% to 0.5% of the loan amount, billed monthly along with your loan payment. For a $20,000 loan, the annual cost ranges from $60 to $100.

Claim Process

If your vehicle is totaled, you file a claim with the gap insurer. The insurer pays the difference between the loan balance and the vehicle's actual cash value, up to the policy limit.

Steps to File a Claim

When Gap Insurance Is Worth It

Gap coverage is most valuable when:

• You made a small down payment.
• Your loan term is long (e.g., 60+ months).
• The vehicle depreciates quickly.

Alternatives and Comparisons

Some lenders offer gap insurance as a standard benefit, while others charge a fee. Compare BofA's option with other banks or insurance companies:

Key Takeaways

Bank of America's auto loan gap insurance offers a safety net for borrowers who may owe more than their car's value. It is optional, has modest monthly costs, and can prevent a significant out‑of‑pocket expense after a total loss.