Kentucky gap insurance: Everything you need to know

How much is gap insurance in Kentucky?

On average, gap insurance in Kentucky costs $3,534 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 Kentucky

Travelers offers the cheapest gap insurance coverage in Kentucky at $1,893 annually. Not all car insurance companies provide gap coverage, and rates differ widely by company.

See the table below to find the cheapest insurance companies for gap coverage in Kentucky.

Company	Auto insurance rates with gap premium	Gap premium
Travelers	$1,893	$47
Auto-Owners	$2,017	$53
Progressive	$3,336	$61
Allstate	$4,162	$136
Farmers	$6,260	$245

Read our methodology

Average gap insurance cost in Kentucky by city

Louisville has the highest gap insurance rates at an average of $3,808 a year, while Owensboro offers the lowest at an average of $2,308 per year. Where you live in Kentucky 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 Kentucky.

City	Auto insurance rates with gap premium	Gap premium
Owensboro	$2,308	$76
Versailles	$2,308	$69
Midway	$2,494	$77
Bowling Green	$2,516	$81
Ashland	$2,809	$91
Murray	$2,842	$100
Sturgis	$3,001	$111
Crofton	$3,027	$106
Ghent	$3,148	$113
Milton	$3,204	$115

Read our methodology

How much is gap insurance in Kentucky by age group?

Gap insurance rates are higher for younger drivers because they have less experience and are more likely to take risks while driving, increasing the odds of a total loss. As drivers get older, their rates go down. For example, an 18-year-old pays an average of $13,625 per year, while a 25-year-old pays around $4,279 annually.

The table below lists the average gap insurance rates in Kentucky based on age.

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$13,625	$444
Young adult	$4,279	$136
Adult	$3,534	$108
Senior	$3,244	$93

Read our methodology

How does gap insurance work in Kentucky?

Right after you buy or lease a new car, it depreciates, causing you to owe more than the car is worth. If your car gets totaled, your insurance company pays only the car's actual cash value. This payout may leave you still owing money on the loan. That's where gap insurance helps. If someone totals or steals your car, gap insurance pays the difference between your car's value and the amount 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, imagine you have a $40,000 car loan, but your vehicle's actual cash value is only $35,000. If someone steals your car, your insurance company reimburses 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 pays the remaining $5,000 you still owe on the loan. Without gap insurance, you must cover this difference out of pocket.

Once your loan balance is lower than your car's value, you can drop gap coverage. You can cancel gap insurance anytime, but you may not be able to add it whenever you want. Most insurers require you to add the coverage soon after you buy a car.

Many lenders also require gap insurance when you take out a loan. You can buy gap coverage from your lender or car dealership, but adding it to your existing auto policy usually costs less.

Where to buy gap insurance in Kentucky

Many insurance companies, including major carriers, offer gap insurance in Kentucky. It's relatively easy to add coverage to your current auto insurance policy.

Adding gap coverage to your auto insurance policy is usually the most cost-effective option. While you can purchase gap coverage from most car dealers and lenders, those policies tend to be more expensive, making it a less attractive option.

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.

Kentucky gap insurance: FAQs

Is gap insurance required in Kentucky?

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

Who should buy gap insurance in Kentucky?

You may need gap insurance in Kentucky if you lease or finance a car with a small down payment. Since cars lose value faster than loans are paid off, gap insurance can protect you from owing more than your car is worth.

You don't need gap insurance if you own your car or make a large down payment.

What is standalone gap insurance in Kentucky?

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 Kentucky?

Kentucky 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.