Minnesota 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 Minnesota, but many lenders and leasing companies require it. In Minnesota, gap insurance costs an average of $2,648 per year, with Travelers offering the lowest rates.

Last updated: Mar 3, 2026

How much is gap insurance in Minnesota?

In Minnesota, gap insurance costs an average of $2,648 per year, but prices vary by company. Your car's value also affects the cost of gap insurance. Expensive or luxury cars depreciate faster than standard vehicles, so gap coverage may have to pay more, leading to higher rates.

Cheapest gap insurance companies in Minnesota

The cheapest company for gap insurance in Minnesota is Travelers, with an average annual cost of $1,888. Not all car insurance companies offer gap coverage, and rates vary significantly by company.

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

Company	Auto insurance rates with gap premium	Gap premium
Travelers	$1,888	$51
Auto-Owners	$2,325	$76
Nationwide	$2,765	$68
North Star Mutual	$3,613	$203

Read our methodology

Average gap insurance cost in Minnesota by city

Moorhead offers the cheapest gap insurance in Minnesota at an average of $2,216. Where you live in Minnesota 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 Minnesota.

City	Auto insurance rates with gap premium	Gap premium
Moorhead	$2,216	$83
Dilworth	$2,234	$84
Northrop	$2,258	$85
Stewartville	$2,261	$85
Byron	$2,266	$85
Fairmont	$2,269	$84
St. Peter	$2,278	$85
Welcome	$2,282	$86
Oronoco	$2,284	$85
Janesville	$2,285	$85

Read our methodology

How much is gap insurance in Minnesota 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 $6,739 per year, while a 25-year-old pays around $2,997 annually.

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

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$6,739	$252
Young adult	$2,997	$112
Adult	$2,648	$100
Senior	$2,343	$86

Read our methodology

How does gap insurance work in Minnesota?

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 Minnesota

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

Minnesota gap insurance: FAQs

Is gap insurance required in Minnesota?

Gap insurance isn't required by Minnesota law. However, your lender may require the coverage.

Who should buy gap insurance in Minnesota?

You may need gap insurance if you have a car loan or lease in Minnesota. Drivers who make a small down payment typically owe more than the vehicle is worth since cars depreciate faster than the loan is paid down, making gap insurance a good idea.

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 Minnesota?

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.

Does gap insurance cover leased cars in Minnesota?

Minnesota 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.