Arizona gap insurance: Everything you need to know

How much is gap insurance in Arizona?

Gap insurance in Arizona costs an average of $2,644 per year. Your price will vary by insurer, vehicle value, and other rating factors. Vehicles that lose value quickly create a larger difference between the loan balance and actual cash value, making gap coverage especially useful for those drivers. The cost of your vehicle can also affect gap insurance rates. Expensive or luxury vehicles may depreciate quickly, which can increase the amount of insurance required to cover a total loss.

Cheapest gap insurance companies in Arizona

The cheapest gap insurance in Arizona is offered by Travelers, with an average yearly cost of $1,784. 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	$1,784	$50
Progressive	$3,503	$125

Read our methodology

Average gap insurance cost in Arizona by city

Lake Havasu City has the cheapest average gap insurance rate in Arizona at $1,905 per year. Rates vary by city because insurers consider local claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing. patterns, theft, traffic, repair costs and other location-based risks when pricing auto insurance. Your individual rate will differ from the city average.

If you live in an area with more theft, accidents, or costly claims, you may pay higher overall auto insurance rates. Because gap coverage is often added to an auto policy, these local pricing differences can affect the total cost of coverage.

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

City	Auto insurance rates with gap premium	Gap premium
Lake Havasu City	$1,905	$63
Safford	$1,955	$65
Sierra Vista Southeast	$1,975	$65
Douglas	$1,992	$66
Bisbee	$2,004	$66
Morenci	$2,008	$66
Pima	$2,010	$67
Sierra Vista	$2,011	$67
Hereford	$2,025	$67
Topock	$2,027	$68

Read our methodology

If you live in an area with more theft, accidents, or expensive claims, you'll likely pay more for auto insurance overall. Since gap insurance is added to your auto policy, those location-based differences also affect your total cost.

How much is gap insurance in Arizona by age group?

An 18-year-old driver in Arizona pays $7,424 a year for gap insurance, while a 25-year-old pays $2,961 annually for gap insurance. Younger drivers pay more because they have less experience and a higher chance of filing claims. As you gain experience and keep a clean record, your rates will drop.

Age is just one factor in your insurance cost. Your driving record, location, vehicle, insurer, and coverage choices also affect your price. Even drivers of the same age pay very different rates.

Here are the gap insurance rates in Arizona for different age groups.

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$7,424	$215
Young adult	$2,961	$97
Adult	$2,644	$88
Senior	$2,459	$84

Read our methodology

How does gap insurance work in Arizona?

When you buy or lease a new car, it depreciates quickly, resulting in you owing more than it's worth. If your car is totaled, your insurance company will only pay its actual cash value, which might not cover your full loan balance. That's where gap insurance helps. If your car is totaled or stolen, gap insurance covers the difference between your car's value and what you still owe on the loan.

"Gap is designed for people who 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.

Once your loan is less than the value of your car, you can drop gap coverage. While you can always cancel gap insurance, you may be unable to add it anytime. Most insurers want you to add the coverage quickly after buying a car.

Additionally, many lenders require gap insurance when getting your loan. Although you can get gap coverage through your lender or car dealership, adding it to your current auto policy is usually cheaper.

Where to buy gap insurance in Arizona

You can buy gap insurance in Arizona from auto insurers, lenders, dealerships, or standalone providers. You'll usually pay less when you add it to your auto insurance policy. Dealer and lender options often cost more, so compare prices, coverage limits, eligibility rules, and cancellation terms before you choose.

Gap coverage is also available from most car dealers and lenders, but their policies are often more expensive, making them a less appealing choice.

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?

No, Arizona law does not require drivers to carry gap insurance. However, a lender or leasing company may require coverage under the terms of a loan or lease agreement.

Who should buy gap insurance in Arizona?

If you have a car loan or lease in Arizona, you might need gap insurance. If you made a small down payment, you could quickly owe more than your car is worth since vehicles lose value faster than you can pay off the loan. In this case, gap insurance can be a smart choice.

You don't need gap insurance if you own your car or made a large down payment to ensure that you owe less than the car's value at the start of your loan.

What is standalone gap insurance in Arizona?

Standalone gap insurance is a separate policy, not a part of your car insurance. You can buy gap insurance from your lender or a private company as an independent policy.

Does gap insurance cover leased cars in Arizona?

Yes, gap insurance in Arizona covers leased cars when you owe more than the car is worth after a total loss. You can drop gap coverage once your lease balance is lower than the car's value.