How much is gap insurance in Michigan?

The average cost of gap insurance in Michigan is $5,250 per year, but your rate will vary by insurer, vehicle value, and other factors. Fast-depreciating cars increase the gap between value and loan balance, making coverage more useful. The cost of the vehicle also matters, since luxury or high-cost cars often lose value faster, raising the potential difference after a total loss.

Cheapest gap insurance companies in Michigan

The cheapest gap insurance in Michigan is offered by Progressive, with an average yearly cost of $2,863. 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 Michigan insurance companies for gap coverage.

CompanyAuto insurance rates with gap premiumGap premium
Progressive$2,863$19
Auto-Owners$2,930$91
Frankenmuth Insurance$5,578$308
The Hanover$9,628$43
Read our methodology

Average gap insurance cost in Michigan by city

Saline has the cheapest average gap insurance rate in Michigan at $3,805 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 Michigan.

CityAuto insurance rates with gap premiumGap premium
Saline$3,805$93
Williams$3,834$90
Spring Lake$3,868$93
Lambertville$3,869$95
Ida$3,886$98
Samaria$3,886$94
York$3,896$98
Kawkawlin$3,904$98
Saugatuck$3,904$90
Grand Haven$3,912$93
Read our methodology

How much is gap insurance in Michigan by age group?

Gap insurance coverage for an 18-year-old driver costs $14,027 a year and costs $6,699 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.

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 Michigan for different age groups.

Age groupAuto insurance rates with gap premiumGap premium
Teen$14,027$232
Young adult$6,699$150
Adult$5,250$116
Senior$4,615$96
Read our methodology

How does gap insurance work in Michigan?

Gap insurance in Michigan 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 Michigan

You can buy gap insurance in Michigan from many auto insurers, dealerships, lenders, and some standalone providers. Adding gap coverage to an existing auto policy is often the most affordable option, while dealer or lender products may cost more. Compare prices, coverage limits, cancellation terms, and eligibility before choosing.

You can also buy gap coverage from most car dealers and lenders, but their policies are often more expensive, making them a less appealing choice.

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.

Michigan gap insurance: FAQs

Is gap insurance required in Michigan?

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

You should buy gap insurance if you finance or lease a vehicle and may owe more than it is worth, which often happens with small down payments, long loan terms or fast-depreciating cars. It is also helpful if you roll taxes, fees, warranties or an existing loan into a new loan. You do not need it if you own the vehicle outright or already owe less than its value.

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.

Michigan 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 Michigan gap insurance rates with other states

Alabama
$2,064 /year
Arizona
$2,644 /year
Arkansas
$2,925 /year
California
$3,775 /year
Colorado
$3,055 /year
Connecticut
$3,850 /year
Delaware
$3,983 /year
Florida
$4,297 /year
Georgia
$2,502 /year
Idaho
$2,073 /year
Illinois
$1,812 /year
Indiana
$1,992 /year
Iowa
$2,513 /year
Kansas
$2,162 /year
Kentucky
$2,965 /year
Maine
$1,845 /year
Maryland
$2,193 /year
Massachusetts
$2,563 /year
Minnesota
$2,648 /year
Mississippi
$2,389 /year
Missouri
$2,470 /year
Montana
$2,580 /year
Nebraska
$2,691 /year
Nevada
$3,591 /year
New Hampshire
$1,834 /year
New Jersey
$3,306 /year
New Mexico
$2,775 /year
North Dakota
$2,539 /year
Ohio
$1,991 /year
Oklahoma
$2,526 /year
Oregon
$1,773 /year
Pennsylvania
$2,417 /year
Rhode Island
$3,059 /year
South Dakota
$3,116 /year
Tennessee
$2,299 /year
Texas
$3,783 /year
Utah
$2,570 /year
Vermont
$1,675 /year
Virginia
$2,836 /year
Washington
$2,868 /year
Washington, D.C.
$4,426 /year
West Virginia
$2,543 /year
Wisconsin
$2,431 /year
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