Tennessee gap insurance: Everything you need to know

How much is gap insurance in Tennessee?

Gap insurance in Tennessee costs an average of $2,299 per year. Your price will vary by insurer, vehicle value, and other rating factors. Vehicles that lose value quickly create a larger difference between the loan balance and actual cash value, making gap coverage especially useful for those drivers. The cost of your vehicle can also affect gap insurance rates. Expensive or luxury vehicles may depreciate quickly, which can increase the amount of insurance required to cover a total loss.

Cheapest gap insurance companies in Tennessee

The cheapest gap insurance in Tennessee is offered by Auto-Owners, with an average yearly cost of $1,992. 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 Tennessee insurance companies for gap coverage.

Company	Auto insurance rates with gap premium	Gap premium
Auto-Owners	$1,992	$66
Nationwide	$2,605	$81

Read our methodology

Average gap insurance cost in Tennessee by city

Bristol offers the cheapest gap insurance in Tennessee at an average of $1,716. Where you live in Tennessee 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.

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 Tennessee.

City	Auto insurance rates with gap premium	Gap premium
Bristol	$1,716	$55
Colonial Heights	$1,743	$57
Blountville	$1,749	$56
Piney Flats	$1,750	$56
Bluff City	$1,752	$57
Kingsport	$1,759	$57
Mountain Home	$1,766	$57
Jonesborough	$1,789	$58
Telford	$1,789	$58
Fall Branch	$1,799	$58

Read our methodology

How much is gap insurance in Tennessee by age group?

Gap insurance coverage for an 18-year-old driver costs $8,730 a year and costs $2,863 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 of several factors that influence insurance costs. What you pay will also vary based on your location, vehicle, driving record, coverage selections, and the insurance company you choose.

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

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$8,730	$290
Young adult	$2,863	$92
Adult	$2,299	$74
Senior	$2,105	$64

Read our methodology

How does gap insurance work in Tennessee?

Gap insurance in Tennessee 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 Tennessee

You can buy gap insurance in Tennessee from auto insurers, lenders, dealerships, or standalone providers. You'll usually pay less when you add it to your auto insurance policy. Dealer and lender options often cost more, so compare prices, coverage limits, eligibility rules, and cancellation terms before you choose.

Gap coverage is also available from most car dealers and lenders, but their policies are often more expensive, making them a less appealing choice.

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.

Tennessee gap insurance: FAQs

Is gap insurance required in Tennessee?

No, Tennessee law does not require drivers to carry gap insurance. However, a lender or leasing company may require coverage under the terms of a loan or lease agreement.

Who should buy gap insurance in Tennessee?

You should consider gap insurance if you finance or lease a vehicle and will 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.

What is standalone gap insurance in Tennessee?

Standalone gap insurance in Tennessee is a separate policy that is not added to your auto insurance through a lender, dealership, or third party. It's useful if your insurer doesn't offer gap coverage, but terms differ, so always review what's covered and any payout limits after a total loss.

Does gap insurance cover leased cars in Tennessee?

Yes, gap insurance covers a leased vehicle in Tennessee if it's totaled and you owe more than its actual cash value. Many lease agreements already include gap coverage, so check your contract first; if not, you can add it through your insurer or leasing company. Gap insurance can be removed once the loan balance is lower than the vehicle's value.