Arizona gap insurance: Everything you need to know

How much is gap insurance in Arizona?

In Arizona, gap insurance costs an average of $3,261 per year, but prices vary by company. Your car's value also affects the cost of gap insurance. Expensive or luxury cars depreciate faster than standard vehicles, so gap coverage may have to pay more, leading to higher rates.

Cheapest gap insurance companies in Arizona

The cheapest gap insurance in Arizona is offered by Travelers, with an average yearly cost of $1,593. Not all car insurance companies provide gap coverage, and rates can vary significantly among carriers.

Take a look at the table below to see the cheapest Arizona insurance companies for gap coverage.

Company	Auto insurance rates with gap premium	Gap premium
Travelers	$1,593	$39
Auto-Owners	$1,757	$52
Nationwide	$2,044	$62
Progressive	$2,152	$34
The Hartford	$2,512	$91
CSAA Insurance (AAA)	$5,881	$185
Farmers	$6,888	$265

Read our methodology

Average gap insurance cost in Arizona by city

Phoenix is the most expensive to buy gap insurance with an average rate of $4,032, and Willcox is the cheapest with an average of $2,678. Where you live in Arizona can affect your insurance rates. Auto insurance rates are higher in cities with more crime and theft since your vehicle is more likely to be damaged or stolen.

This table shows the average gap insurance rates by city for Arizona.

City	Auto insurance rates with gap premium	Gap premium
Willcox	$2,678	$100
Douglas	$2,709	$101
Benson	$2,730	$93
Sedona	$2,892	$97
Nogales	$3,032	$108
Mesa	$3,325	$102
Tempe	$3,334	$101
Tucson	$3,348	$109
South Tucson	$3,402	$110
Avondale	$3,620	$121

Read our methodology

How much is gap insurance in Arizona by age group?

Car insurance rates for younger drivers are more expensive because they are more likely to engage in risky driving and lack the experience needed to avoid accidents. Rates go down as the driver gets older. For example, at 18 years old the average rate is $10,841 a year, and at 25 the average annual rate is $4,007.

The table below shows the average gap insurance rates in Arizona by age.

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$10,841	$329
Young adult	$4,007	$130
Adult	$3,261	$104
Senior	$2,893	$86

Read our methodology

How does gap insurance work in Arizona?

When you buy or lease a new car, depreciationDepreciation is the decrease in your car's value over time due to wear and tear, age and mileage. Depreciation is used to determine the actual cash value of a vehicle in the event of a total loss. can quickly cause you to owe more than the car is worth. If your car is totaled, the insurance company will only pay out the car's actual cash value, which may leave you owing on the loan. That's where gap insurance comes in. If your vehicle is totaled or stolen, gap insurance covers the difference between your car's value and the loan payoff.

"Gap is designed for people that take long-term loans and/or roll taxes, service plans, or warranties into their loan," said Zack Pope, agency manager at David Pope Insurance in Missouri. "Most gap coverages only go a certain percent over market value to pay off a loan for a totaled vehicle (typically 25%). It costs significantly less money to get gap through your insurance than to purchase it from the dealership."

For example, let's say you have a $40,000 car loan, but your vehicle's actual cash value is only $35,000. If the car is stolen, your insurance company will reimburse you $35,000, minus your deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim.. Gap insurance would cover the remaining $5,000 that you still owe on your loan. Without gap insurance, you'd be responsible for paying this difference out of pocket.

You can drop gap coverage once your loan balance is below your car's value. While you can cancel gap insurance anytime, you may not be able to add it later. Most insurers require you to add gap coverage soon after buying a car.

Where to buy gap insurance in Arizona

Many insurance companies, including major providers, offer gap insurance in Arizona. You can add this coverage to your existing car insurance policy or buy a standalone policy.

The best way to get gap coverage is to add it to your auto insurance policy. Car dealers and lenders also offer gap insurance, but their policies are mostly expensive, making them less budget-friendly.

Methodology

We gathered car insurance rates with and without gap insurance through our data partner, Quadrant Information Services.

Averages are annual and based on our full coverage data set. This data set is based on:

Bodily injury liability of $100,000 per person and $300,000 per incident
Property damage liability of $100,000 per incident
Comprehensive and collision deductibles of $500
40-year-old driver
Honda Accord LX
Good credit
A clean driving record
12-mile commute, 10,000 annual mileage

To show the cost of gap insurance, we have compared rates with gap insurance added to the averages without gap insurance, and the difference is shown as the annual cost of gap insurance.

Rates are based on an analysis of over 5 million data points in all 50 states and Washington, D.C. from 138 companies.

Arizona gap insurance: FAQs

Is gap insurance required in Arizona?

Gap insurance isn't required by Arizona law. However, your lender may require the coverage.

Who should buy gap insurance in Arizona?

You may need gap insurance if you have a car loan or lease in Arizona. Drivers who make a small down payment typically owe more than the vehicle is worth since cars depreciate faster than the loan is paid down, making gap insurance a good idea.

You don't need gap insurance if you own your vehicle or make a large down payment so that you owe less than the car's value from the start of your loan.

What is standalone gap insurance in Arizona?

Standalone gap insurance is a policy of its own, not connected with your car insurance. Gap insurance is available from your lender or a private company as a separate policy.

Does gap insurance cover leased cars in Arizona?

Arizona gap insurance covers leased cars where the driver owes more than the vehicle's current market value. Over time, you may remove gap coverage once your vehicle is worth more than what is owed.