Arizona gap insurance: Everything you need to know

How much is gap insurance in Arizona?

On average, gap insurance in Arizona costs $3,261 a year, but rates vary by company. The cost of your vehicle also affects gap rates. Expensive or luxurious cars tend to depreciate faster than standard vehicles, meaning gap coverage would have to pay more, which increases coverage rates.

Cheapest gap insurance companies in Arizona

The cheapest gap insurance in Arizona is offered by Travelers, with an average yearly cost of $1,593. 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 Arizona insurance companies for gap coverage.

Company	Auto insurance rates with gap premium	Gap premium
Travelers	$1,593	$39
Auto-Owners	$1,757	$52
Nationwide	$2,044	$62
Progressive	$2,152	$34
The Hartford	$2,512	$91
CSAA Insurance (AAA)	$5,881	$185
Farmers	$6,888	$265

Data updated in 2024

Read our methodology

Average gap insurance cost in Arizona by city

Gap insurance costs the most in Phoenix, with an average rate of $4,032, while Willcox has the lowest rate at $2,678. Where you live in Arizona can impact your insurance costs. Cities with higher crime and theft rates have higher auto insurance rates since the risk of damage or theft is higher.

Here are the average gap insurance rates by city in Arizona

City	Auto insurance rates with gap premium	Gap premium
Willcox	$2,678	$100
Douglas	$2,709	$101
Benson	$2,730	$93
Sedona	$2,892	$97
Nogales	$3,032	$108
Mesa	$3,325	$102
Tempe	$3,334	$101
Tucson	$3,348	$109
South Tucson	$3,402	$110
Avondale	$3,620	$121

Data updated in 2024

Read our methodology

How much is gap insurance in Arizona 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 $10,841 per year, while a 25-year-old pays around $4,007 annually.

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

Age group	Auto insurance rates with gap premium	Gap premium
Teen	$10,841	$329
Young adult	$4,007	$130
Adult	$3,261	$104
Senior	$2,893	$86

Data updated in 2024

Read our methodology

How does gap insurance work in Arizona?

When you buy or lease a new car, it depreciates quickly resulting in you owing more than it's worth. If your car is totaled, your insurance company will only pay its actual cash value, which might not cover your full loan balance. That's where gap insurance helps. If your car is totaled or stolen, gap insurance covers the difference between your car's value and what 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, 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 Arizona

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

Insurance.com commissioned gap insurance rates from Quadrant Data Services in late 2023 at a variety of ages in all 50 states and Washington, D.C. Base rates use a 40-year-old driver with a 2023 Honda Accord LX. Rates were gathered from 138 insurance companies in 1,468 ZIP codes.

Arizona gap insurance: FAQs

Is gap insurance required in Arizona?

Gap insurance isn't required by law in Arizona, but your lender may require you to have the coverage.

Who should buy gap insurance in Arizona?

You may need gap insurance if you have a car loan or lease in Arizona. 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 car or made a large down payment to ensure that you owe less than the car's value at the start of your loan.

What is standalone gap insurance in Arizona?

Standalone gap insurance is a policy of its own, not connected with your car insurance. Gap insurance is available from your lender or a private company as a separate policy.

Does gap insurance cover leased cars in Arizona?

Arizona 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.