How much is gap insurance in California?
On average, gap insurance in California costs $3,775 per year, but rates vary by company. The cost of your vehicle also affects gap rates. Expensive or luxurious cars tend to depreciate faster than standard vehicles, meaning gap coverage would have to pay more, which increases coverage rates.
Cheapest gap insurance companies in California
Mercury Insurance offers the cheapest gap insurance in California, with an average annual rate of $2,841. Gap coverage is not available from every auto insurance company, and prices differ considerably among insurers. Comparing companies can help you find affordable coverage that fits your needs.
Take a look at the table below to see the cheapest California insurance companies for gap coverage.
| Company | Auto insurance rates with gap premium | Gap premium |
|---|---|---|
| Mercury Insurance | $2,841 | $55 |
| CSAA Insurance (AAA) | $2,986 | $109 |
| Progressive | $3,028 | $15 |
| Nationwide | $4,451 | $136 |
| Allstate | $4,491 | $153 |
| Farmers | $4,853 | $241 |
Average gap insurance cost in California by city
Yreka has the cheapest average gap insurance rate in California at $2,757 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 California.
| City | Auto insurance rates with gap premium | Gap premium |
|---|---|---|
| Yreka | $2,757 | $86 |
| Mount Shasta | $2,771 | $88 |
| Weed | $2,840 | $90 |
| Montague | $2,871 | $90 |
| Red Bluff | $2,871 | $89 |
| King City | $2,888 | $91 |
| Orland | $2,918 | $92 |
| Shingletown | $2,918 | $91 |
| Pacific Grove | $2,928 | $93 |
| Weaverville | $2,933 | $92 |
Drivers in areas with higher theft rates, more accidents, or more expensive claims may face higher overall auto insurance costs. Since gap coverage is often added to an auto policy, location-based pricing differences can influence the total cost of coverage.
How much is gap insurance in California by age group?
Gap insurance for an 18-year-old driver in California costs $10,306 a year, while a 25-year-old pays $4,560 annually. Age affects overall auto insurance costs because younger drivers have less experience and a higher risk of claims. Rates often decrease as drivers gain experience and maintain clean records.
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 California for different age groups.
| Age group | Auto insurance rates with gap premium | Gap premium |
|---|---|---|
| Teen | $10,306 | $312 |
| Young adult | $4,560 | $146 |
| Adult | $3,775 | $118 |
| Senior | $3,496 | $106 |
How does gap insurance work in California?
Gap insurance in California helps you when your car is totaled or stolen, and you owe more on your loan or lease than the car is worth. Your standard auto insurance pays the actual cash value of the car, but that may not cover your full loan balance. Gap insurance pays the difference.
New cars lose value fast, sometimes faster than you pay down your loan. That can leave you upside down on your loan soon after you buy or lease the car.
"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 California
Gap insurance in California can be purchased from many insurers, dealerships, lenders, or standalone providers. Adding it to an existing auto policy is usually the cheapest option, while dealer or lender coverage often costs more. Price, coverage limits, cancellation terms, and eligibility should always be compared before selecting a policy.
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.
California gap insurance: FAQs
Is gap insurance required in California?
California law doesn't require gap insurance, but your lender may require it.
Who should buy gap insurance in California?
If you have a car loan or lease in California, 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 California?
Standalone gap insurance in California is a separate policy that is not added to your auto insurance through a lender, dealership, or third party. It's useful if your insurer doesn't offer gap coverage, but terms differ, so always review what's covered and any payout limits after a total loss.
Does gap insurance cover leased cars in California?
California gap insurance covers leased cars when the driver owes more than the car's current market value. You can remove gap coverage once your vehicle is worth more than what you still owe.
Compare California gap insurance rates with other states
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