PHYSICAL DAMAGE
Leased Value & Financed Value Insurance
Gap Insurance for When You Owe More Than Your Truck Is Worth
Leased Value coverage is for owner-operators and motor carriers that lease or finance new tractors, trailers, or trucks.
If you have an accident, your Commercial Auto policy will pay you the lesser of the stated limit or the actual cash value of your truck if it is a total loss, but it won’t pay off any remaining loan or lease balance.
As we’re all painfully aware, new vehicles lose value immediately after they leave the dealership.
Because of this, your payoff is usually higher than the actual cash value of your truck during the first half of a five-year lease or loan. This can leave a new truck owner stuck having to pay the remaining lease or loan balance out of pocket.
That’s why Great West offers optional Lease and Financed Value coverage to help protect against this gap in financial protection.
What is leased value & financed value insurance?
Lease Value and Financed Value insurance is an optional endorsement — or amendment — that modifies the coverage of your Physical Damage policy.
Protection applies to specific tractors, trailers, or trucks. You must have full Physical Damage coverage on your equipment to add this endorsement, but you do not need to pay for a “blanket” policy for all of your units — you can simply select the equipment you want to cover.
How does leased & financed value protection work?
Your endorsement will apply when the cost to pay off a lease or loan exceeds the actual cash value after a total loss or theft.
For example, if you owe $50,000 on your truck’s loan and your semi is worth $45,000, this endorsement will pay the $5,000 gap, minus your deductible, when you have an accident that results in a total loss.
When a claim is filed, payment is made within 30 days for any covered loss or 60 days in the case of a theft.
This coverage does not apply to:
- Overdue lease/loan payments or penalties due at the time of loss
- Financial penalties imposed for excessive use, abnormal wear and tear, or high mileage
- Security deposits
- Costs for extended warranties (i.e. credit life)
- Carryover balances from a previous lease/loan
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Leased Value & Financed Value Coverage Pros & Cons
Coverage Benefits
- Comfort knowing that your financial exposure is limited.
- Cost for coverage is low: the rate is 5% of a motor carrier’s Physical Damage premium.
- Coverage can be dropped once value parity is reached.
Coverage Limitations
- The endorsement is an extra insurance expense on top of other insurance costs.
- Coverage is limited to a total loss or vehicle theft and may not apply to additional expenses associated with a loan or lease.
Who should consider leased value & financed value coverage?
We recommend considering this endorsement when there is a significant difference in the value of your truck and the cost to pay off your loan or lease.
Examples of when you may need this coverage:
- In the first half of a five-year loan, when your loan value is greater than an actual cash value payout
- Under a lease, some companies may require Lease Value coverage
- When you made a low down payment on a truck
- If you have a long financing term
- Typically, a truck owner will drop Lease and Financed Value coverage when the contract value on the truck meets the actual cash value. We advise new truck owners to monitor this annually because vehicle values in the used truck market vary widely.
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Insurance Contracts are Underwritten, Administered, and Issued by: Great West Casualty Company, Old Republic Life Insurance Company, and Old Republic Union Insurance Company.
One or more Old Republic companies may provide the products and/or services described. Information presented is for illustrative purposes only and does not constitute a contract or advice, including employment advice or advice to motor carriers. Please refer to the relevant insurance policy for actual terms. Products and services may not be available in all states and may be subject to change without notice. © 2026 Old Republic International Corporation. Old Republic® and the Old Republic Circle of Stars monogram are registered trademarks. All Rights Reserved.