Kentucky gap insurance: Everything you need to know

Gap insurance covers the difference between your car’s value and the amount you still owe if it’s totaled or stolen. It’s not required by law in Kentucky, but many lenders and leasing companies require it. In Kentucky, gap insurance costs an average of $2,965 per year, with Travelers offering the lowest rates.

Last updated: Mar 2, 2026

How much does gap insurance cost in Kentucky?

Gap insurance in Kentucky costs $2,965 per year, on average, but rates vary by company. The value of your vehicle also affects the cost of gap coverage. Expensive or luxury cars usually depreciate faster than standard vehicles, so gap insurance may have to cover more, which increases the cost.

Cheapest gap insurance companies in Kentucky

The cheapest company for gap insurance in Kentucky is Travelers, with an average annual cost of $1,883. Not all car insurance companies offer gap coverage, and rates vary significantly by company.

Check out the table below to find the cheapest Kentucky insurance companies for gap coverage.

Company	Auto insurance rates with gap premium	Gap premium
Travelers	$1,883	$55
Shelter Insurance	$2,132	$70
Auto-Owners	$2,632	$73
Progressive	$2,863	$49
Nationwide	$2,919	$67
Kentucky Farm Bureau Insurance	$3,225	$130
Allstate	$5,099	$196

Read our methodology

Average gap insurance cost in Kentucky by city

Fort Thomas offers the cheapest gap insurance in Kentucky at an average of $2,113. Where you live in Kentucky 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 Kentucky.

City	Auto insurance rates with gap premium	Gap premium
Fort Thomas	$2,113	$66
Florence	$2,120	$67
Highland Heights	$2,135	$68
Owensboro	$2,144	$67
Silver Grove	$2,152	$67
Nicholasville	$2,153	$66
Burlington	$2,157	$68
Wilmore	$2,166	$67
Bellevue	$2,169	$68
Erlanger	$2,172	$68

Read our methodology

How much is gap insurance in Kentucky by age group?

Gap insurance coverage for an 18-year-old driver costs $9,304 a year and costs $3,524 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 Kentucky for different age groups.

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$9,304	$371
Young adult	$3,524	$114
Adult	$2,965	$91
Senior	$2,717	$80

Read our methodology

How does gap insurance work in Kentucky?

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.

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 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?

If you have a car loan or lease in Kentucky, 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 car or make a large down payment.

What is standalone gap insurance in Kentucky?

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

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.