How much does gap insurance cost?
Adding gap coverage to your car insurance policy costs less than $100 a year with most carriers. Costs when purchased through a dealer or other standalone options vary widely.
The rates below are based on a full coverage policy with 100/300/100 in liability coverage and $500 deductibles. To purchase gap insurance, you must have full coverage on your policy.
| Company | Average annual premium without gap coverage | Premium with gap insurance added |
|---|---|---|
| Vermont Mutual | $1,353 | $1,424 |
| Mapfre Insurance | $1,424 | $1,493 |
| Frankenmuth Insurance | $1,402 | $1,503 |
| Auto Club Group - ACG (AAA) | $1,423 | $1,505 |
| Erie Insurance | $1,390 | $1,628 |
| Safety Insurance | $1,772 | $1,797 |
| The Hanover | $1,760 | $1,831 |
| State Farm | $1,822 | $1,869 |
| Auto-Owners | $1,850 | $1,912 |
| Travelers | $1,977 | $2,026 |
| American Family | $1,998 | $2,056 |
| Nationwide | $2,115 | $2,183 |
| Shelter Insurance | $2,366 | $2,480 |
| Auto Club Enterprises (AAA) | $2,394 | $2,483 |
| Iowa Farm Bureau | $2,517 | $2,543 |
| Kemper | $2,531 | $2,622 |
| Progressive | $2,640 | $2,692 |
| The Hartford | $2,770 | $2,891 |
| Mercury Insurance | $2,962 | $3,004 |
| Amica | $3,063 | $3,189 |
| Allstate | $3,947 | $4,066 |
| Farmers | $4,021 | $4,178 |
| Sentry Insurance | $5,956 | $5,980 |
| CSAA Insurance (AAA) | $6,134 | $6,302 |
| USAA | $996 | $1,047 |
What is the average cost of gap insurance by company in each state?
The most expensive gap insurance is through Farmers in Montana and Colorado, at $444 and $393, respectively, added to your annual insurance policy premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods..
The cheapest place and company to buy gap insurance is through Progressive in Ohio and Pennsylvania, with additional annual costs of $19 and $21, respectively.
Find your state below to compare gap insurance rates by company.
| Company | Average annual premium without gap coverage | Premium with gap insurance added |
|---|---|---|
| Travelers | $1,421 | $1,460 |
| Auto-Owners | $2,186 | $2,258 |
| Progressive | $2,571 | $2,653 |
| Farmers | $2,933 | $3,062 |
How does gap insurance work?
Gap insurance works by paying the balance you owe on your loan after your car insurance pays out the value of your car on a total loss 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..
“Imagine you finance a car for $40,000,” says McKenzie. “A year later, the car is totaled in an accident or stolen and not recovered. At that point, the insurance company determines the car’s actual cash valueActual Cash Value (ACV) is the current market value of your car, considering depreciation. It's the amount your insurance will pay if your car is totaled or stolen. is $33,000 and pays out that amount. If you’ve paid only $4,000 toward the loan, you still owe $36,000, leaving a $3,000 gap. Gap Insurance covers that difference so you’re not left paying for a car you no longer have.”
You should also factor in any deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. you’re responsible for. Take a look at the table below to see how McKenzie’s scenario plays out with a $1,000 deductible:
| Remaining balance on the car loan | $36,000 |
| Actual cash value of the car | $33,000 |
| Comprehensive or collision deductible (you pay this before your insurance company pays its share) | $1,000 |
| Insurance company pays | $32,000 |
| How much you would have to pay without gap insurance | $4,000 |
“Without gap Insurance, drivers in this situation could be stuck with no car and an outstanding loan balance,” she says.
FAQ: Cost of gap insurance
How much is gap insurance per month?
“Typically, gap coverage adds about $10 to $15 per month to an auto policy and can offer important financial protection in the early years of a loan or lease,” McKenzie says.
How much is gap insurance on a used car?
Gap insurance on a used car is inexpensive, but some insurance companies only offer it for newer cars. The price will depend on the make and model, your other insurance coverage and your driving record.
How much is gap insurance in Texas?
In Texas, adding gap coverage to your car insurance costs about $70 a year. This is just an average; your cost may be more or less.
How much is gap insurance in California?
It costs about $94 annually to add gap coverage to your car insurance in California. Again, this could be more or less, depending on your situation.
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June 9, 2025You can buy gap insurance through a car dealership, car insurance company,...
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