Iowa gap insurance: Everything you need to know

How much is gap insurance in Iowa?

On average, gap insurance in Iowa costs $1,373 a 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 Iowa

The cheapest gap insurance in Iowa is offered by Travelers, with an average yearly cost of $1,224. 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 Iowa insurance companies for gap coverage.

Company	Auto insurance rates with gap premium	Gap premium
Travelers	$1,224	$38
Progressive	$1,397	$20
Auto-Owners	$1,498	$59

Read our methodology

Average gap insurance cost in Iowa by city

Centerville has the highest gap insurance rates at an average of $1,615 a year, while Iowa City offers the lowest at an average of $1,215 per year. Where you live in Iowa affects your insurance rates. Cities with higher crime and theft have higher insurance costs because your vehicle is at a greater risk of being damaged or stolen.

The table below lists the average gap insurance rates by city in Iowa.

City	Auto insurance rates with gap premium	Gap premium
Iowa City	$1,215	$33
Altoona	$1,285	$34
Story City	$1,288	$36
Kalona	$1,304	$38
Lawton	$1,346	$38
Cedar Falls	$1,355	$40
Ely	$1,417	$39
Atkins	$1,432	$41
Des Moines	$1,473	$38
Centerville	$1,615	$52

Read our methodology

How much is gap insurance in Iowa by age group?

Gap insurance coverage for an 18-year-old driver costs $3,618 a year and costs $1,739 annually for a 25-year-old driver. Car insurance costs more for younger drivers because they are more likely to take risks and have less experience avoiding accidents. However, rates decrease as drivers get older.

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

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$3,618	$89
Young adult	$1,739	$49
Adult	$1,373	$39
Senior	$1,194	$32

Read our methodology

How does gap insurance work in Iowa?

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 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 Iowa

Many insurance companies, including major providers, offer gap insurance in Iowa. 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.

Iowa gap insurance: FAQs

Is gap insurance required in Iowa?

Iowa law doesn't require gap insurance, but your lender may require it.

Who should buy gap insurance in Iowa?

If you have a car loan or lease in Iowa, 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 the loan. In this case, gap insurance can be a smart choice.

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 Iowa?

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 Iowa?

Iowa 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.