Best cheap gap insurance companies in 2025

Best gap insurance companies

Travelers is our pick for the best gap insurance company of 2025. State Farm came in second, followed by Auto-Owners.

We ranked gap insurance companies based on rates, customer complaints using the National Association of Insurance Commissioners complaint index, our annual survey of insurance customers, and financial stability with AM Best. Rates are for a full coverage policy with gap insurance included.

Best gap insurance companies overall
Company	Survey Score	NAIC	AM Best	Average annual premium	Insurance.com score
Travelers	4.41	0.52	A++	$2,922	4.57
State Farm	4.52	0.79	A++	$2,641	4.53
Auto-Owners	4.42	0.54	A+	$2,742	4.52
Erie Insurance	4.47	0.89	A+	$2,337	4.43
American Family	3.99	0.34	A	$3,023	4.31
Nationwide	4.52	0.63	A	$3,538	4.29
Amica	4.68	0.75	A+	$4,993	4.14
Progressive	4.4	0.71	A+	$5,020	4.04
Allstate	4.36	1.1	A+	$5,869	3.69
The Hartford	4.13	1.54	A+	$4,089	3.68
Farmers	4.41	0.86	A	$7,102	3.54
USAA	4.71	1.18	A++	$1,879	4.46

Read our methodology

* The lower the score, the fewer the complaints filed with the NAIC. Companies below 1.0 are better than the industry average.

**Based on a survey of insurance customers.

Cheapest gap insurance companies

State Farm is the cheapest car insurance company for a full coverage policy with gap insurance included among national carriers without eligibility requirements,

If you are eligible, USAA has cheaper rates; it’s only available to current or former members of the military and their families.

Vermont Mutual, a regional carrierAn insurance carrier is the company that provides your car insurance policy and pays claims., has the cheapest rates of all the companies we compared. Other regional carriers also offer cheap rates.

Sentry Insurance, while the actual cost of gap insurance is low, has higher base rates, making it one of the most expensive overall. It's important to compare from all angles.

Cheapest gap insurance companies
Company	Annual premium without gap insurance	Annual premium with gap insurance	Annual gap insurance cost
Vermont Mutual	$1,353	$1,424	$71
Mapfre Insurance	$1,424	$1,493	$69
Frankenmuth Insurance	$1,402	$1,503	$101
Auto Club Group - ACG (AAA)	$1,423	$1,505	$82
Erie Insurance	$1,390	$1,628	$238
Safety Insurance	$1,772	$1,797	$25
The Hanover	$1,760	$1,831	$71
State Farm	$1,822	$1,869	$47
Auto-Owners	$1,850	$1,912	$62
Travelers	$1,977	$2,026	$49
American Family	$1,998	$2,056	$58
Nationwide	$2,115	$2,183	$68
Shelter Insurance	$2,366	$2,480	$114
Auto Club Enterprises (AAA)	$2,394	$2,483	$89
Iowa Farm Bureau	$2,517	$2,543	$26
Kemper	$2,531	$2,622	$91
Progressive	$2,640	$2,692	$52
The Hartford	$2,770	$2,891	$121
Mercury Insurance	$2,962	$3,004	$42
Amica	$3,063	$3,189	$126
Allstate	$3,947	$4,066	$119
Farmers	$4,021	$4,178	$157
Sentry Insurance	$5,956	$5,980	$24
CSAA Insurance (AAA)	$6,134	$6,302	$168
USAA*	$996	$1,047	$51

Read our methodology

*USAA is only available to military members and their families.

Reminder: You can't buy gap insurance unless you have a full coverage car insurance policy; you must have comprehensive and collision coverageCollision coverage helps pay for repairs or replacement of your car if it's damaged in an accident, regardless of who is at fault and is subject to a deductible..

How does gap insurance work?

Gap insurance works by covering your remaining loan balance when your car is a total loss and the insurance company doesn't pay enough to pay it off. Here's a step-by-step look at the process.

Your car is damaged or stolen. After either a collision or theft, you file a claim and the insurance company declares your vehicle a total loss.
The insurance company pays the actual cash value of the vehicle. The insurance company will pay the ACV to your lender directly. The lender will apply this amount to your loan.
You have a leftover loan balance. Let's say you owe $28,000 on your loan, but the car is only worth $23,000. You have a $500 deductible. The insurance company writes a check for $22,500 (the ACV minus the deductible). The remaining loan balance is $5,500.
Gap insurance pays the difference, and you pay your deductible. Gap insurance will pay the remaining loan balance, minus your deductible, in most cases. That means the policy will pay $5,000 to your lender, and you'll pay $500 for the deductible.

Gap insurance can be worthwhile for drivers of all ages, but is particularly helpful for younger drivers who may not have yet built up the savings needed to cover the difference. It can also be quite useful for seniors who may be on fixed incomes and don’t want or need financial surprises. Anyone who can’t afford to pay the difference out of pocket should consider gap insurance.

“It is especially valuable to those who put down very little on their new purchase, or those financing for very extended terms,” says Lynch.

Cheapest gap insurance companies by age

Car insurance companies use their own risk models to determine what premiums to charge drivers, but age is a common factor in car insurance rates. While one company might be the lowest priced for a 40-year-old driver, it may not be the cheapest for an 18-year-old.

For that reason, you should shop around to compare rates as you get older or as your life circumstances change. For example, married drivers typically get better rates than unmarried drivers and homeowners often get a discount, too.

Here’s a look at what companies charge for car insurance with gap insurance included at various ages:

Average annual premium with gap insurance
Company	18 years old	25 years old	40 years old	65 years old
The Hanover	$3,587	$2,200	$1,831	$1,665
Erie Insurance	$4,120	$2,054	$1,628	$1,545
USAA	$4,197	$1,252	$1,047	$1,019
Iowa Farm Bureau	$4,200	$2,710	$2,543	$2,340
Frankenmuth Insurance	$4,551	$2,081	$1,503	$1,431
Auto Club Group - ACG (AAA)	$4,663	$1,795	$1,505	$1,357
State Farm	$4,740	$2,245	$1,869	$1,709
Auto-Owners	$4,789	$2,482	$1,912	$1,783
Vermont Mutual	$4,813	$1,909	$1,424	$1,424
Travelers	$5,384	$2,366	$2,026	$1,911
American Family	$5,595	$2,450	$2,056	$1,993
Safety Insurance	$6,663	$2,041	$1,797	$1,521
Shelter Insurance	$6,870	$3,573	$2,480	$2,179
The Hartford	$7,227	$3,717	$2,891	$2,523
Nationwide	$7,389	$2,631	$2,183	$1,947
Mapfre Insurance	$7,490	$1,729	$1,493	$1,493
Kemper	$7,521	$3,137	$2,622	$2,664
Auto Club Enterprises (AAA)	$8,180	$3,022	$2,483	$2,276
Amica	$10,081	$3,572	$3,189	$3,131
Sentry Insurance	$11,159	$6,939	$5,980	$5,253
Allstate	$11,368	$4,352	$4,066	$3,692
Progressive	$11,775	$3,196	$2,692	$2,418
Mercury Insurance	$12,805	$3,751	$3,004	$2,677
CSAA Insurance (AAA)	$14,925	$6,914	$6,302	$5,357
Farmers	$15,404	$5,109	$4,178	$3,718

Read our methodology

Cheapest gap insurance companies by state

Where you live can have a lot to do with rates. In some states, like West Virginia, drivers can get gap coverage for as little as $35 per year, while it may be closer to $200 in other states.

For that reason, while one company may offer the cheapest rates across the country, an insurance provider that specializes in only a handful of states or one region might offer cheaper rates.

Here’s what some of the best deals for car insurance with gap coverage are by state:

Gap insurance cost by state
State	Annual premium without gap insurance	Annual premium with gap insurance	Cost of Gap insurance
Alabama	$2,278	$2,358	$80
Arizona	$3,157	$3,261	$104
Arkansas	$2,142	$2,228	$86
California	$2,720	$2,814	$94
Colorado	$3,885	$4,043	$158
Connecticut	$2,202	$2,277	$75
Delaware	$3,280	$3,350	$70
Florida	$3,930	$3,993	$63
Georgia	$2,222	$2,274	$52
Idaho	$1,634	$1,703	$69
Illinois	$2,059	$2,141	$82
Indiana	$1,900	$1,973	$73
Iowa	$1,334	$1,373	$39
Kansas	$2,164	$2,254	$90
Kentucky	$3,425	$3,534	$109
Maine	$1,548	$1,602	$54
Maryland	$3,066	$3,160	$94
Massachusetts	$2,291	$2,347	$56
Michigan	$3,933	$4,082	$149
Minnesota	$2,355	$2,442	$87
Mississippi	$2,064	$2,151	$87
Missouri	$4,800	$5,004	$204
Montana	$4,266	$4,463	$197
Nebraska	$2,143	$2,230	$87
Nevada	$3,727	$3,813	$86
New Hampshire	$1,386	$1,448	$62
New Jersey	$2,725	$2,797	$72
New Mexico	$2,224	$2,278	$54
North Dakota	$1,385	$1,434	$49
Ohio	$1,328	$1,413	$85
Oklahoma	$2,918	$3,022	$104
Oregon	$2,048	$2,112	$64
Pennsylvania	$2,360	$2,472	$112
Rhode Island	$2,473	$2,557	$84
South Dakota	$2,814	$2,909	$95
Tennessee	$1,980	$2,056	$76
Texas	$3,294	$3,364	$70
Utah	$2,222	$2,297	$75
Vermont	$1,374	$1,439	$65
Virginia	$1,830	$1,899	$69
Washington	$1,821	$1,871	$50
Washington, D.C.	$1,988	$2,070	$82
West Virginia	$1,519	$1,553	$34
Wisconsin	$2,204	$2,301	$97

Read our methodology

Gap insurance rates by city

Gap insurance rates vary by city, with the average cost in San Antonio, TX at $59 a year and much higher in Philadelphia, PA at $168 a year. Like all car insurance coverage, local factors like accident frequency and crime rates affect the cost of gap insurance.

Here’s a comparison of some of the best rates for full coverage insurance with gap insurance in major cities across the country:

Gap insurance cost in top cities
City, State	Annual premium without gap insurance	Annual premium with gap insurance	Cost of Gap insurance
Chicago, IL	$2,397	$2,490	$93
Dallas, TX	$3,592	$3,669	$77
Houston, TX	$3,865	$3,941	$76
Los Angeles, CA	$3,528	$3,651	$123
Philadelphia, PA	$3,793	$3,961	$168
Phoenix, AZ	$3,904	$4,032	$128
San Antonio, TX	$3,028	$3,087	$59
San Diego, CA	$2,439	$2,521	$82
San Jose, CA	$2,407	$2,491	$84

Read our methodology

Cheapest gap insurance by ZIP code

Insurance companies are very good at calculating risk right down to a particular neighborhood. While one area of a city might be prone to car thefts, for example, another might have relatively few.

Here’s a look at the cheapest ZIP code in each state for gap insurance:

Cheapest ZIP code for gap insurance in each state
ZIP Code	City	Monthly premium with gap insurance	Annual premium with gap insurance	Cost of Gap insurance
35601	Decatur	$178	$2,139	$74
72701	Fayetteville	$170	$2,041	$77
85643	Willcox	$223	$2,678	$100
96122	Portola	$186	$2,228	$77
81657	Vail	$252	$3,024	$125
6351	Jewett City	$157	$1,880	$64
20001	Washington	$173	$2,070	$82
19944	Fenwick Island	$234	$2,806	$69
32948	Fellsmere	$240	$2,882	$45
30601	Athens	$157	$1,883	$53
52240	Iowa City	$101	$1,215	$33
83702	Boise City	$123	$1,476	$58
61704	Bloomington	$148	$1,778	$69
46530	Granger	$135	$1,615	$56
66062	Overland Park	$160	$1,918	$69
42301	Owensboro	$192	$2,308	$76
1950	Newburyport	$148	$1,775	$43
21716	Brunswick	$175	$2,105	$73
4736	Caribou	$125	$1,499	$57
49868	Newberry	$197	$2,364	$81
55331	Tonka Bay	$142	$1,705	$59
65043	Holts Summit	$237	$2,839	$115
39701	Columbus	$159	$1,914	$78
59801	Missoula	$279	$3,342	$130
58078	West Fargo	$99	$1,188	$35
68138	Omaha	$156	$1,866	$72
3743	Claremont	$114	$1,365	$60
7701	Fairview	$172	$2,068	$55
88036	Fort Bayard	$160	$1,919	$49
89406	Fallon	$209	$2,506	$75
44035	Elyria	$93	$1,112	$66
73533	Duncan	$211	$2,534	$98
97424	Cottage Grove	$142	$1,710	$61
15120	Pittsburgh	$182	$2,182	$100
2840	Newport	$166	$1,988	$65
57201	Watertown	$185	$2,223	$68
37764	Sevierville	$154	$1,849	$70
76230	Bowie	$243	$2,913	$78
84737	Hurricane	$163	$1,958	$63
24401	Staunton	$144	$1,723	$75
5602	Montpelier	$115	$1,383	$63
98520	Aberdeen	$143	$1,718	$48
54901	Oshkosh	$119	$1,427	$62
25401	Martinsburg	$116	$1,393	$29

Read our methodology

How does gap insurance work?

Gap insurance works by covering your remaining loan balance when your car is a total loss and the insurance company doesn't pay enough to pay it off. Here's a step-by-step look at the process.

Your car is damaged or stolen. After either a collision or theft, you file a claim and the insurance company declares your vehicle a total loss.
The insurance company pays the actual cash value of the vehicle. The insurance company will pay the ACV to your lender directly. The lender will apply this amount to your loan.
You have a leftover loan balance. Let's say you owe $28,000 on your loan, but the car is only worth $23,000. You have a $500 deductible. The insurance company writes a check for $22,500 (the ACV minus the deductible). The remaining loan balance is $5,500.
Gap insurance pays the difference, and you pay your deductible. Gap insurance will pay the remaining loan balance, minus your deductible, in most cases. That means the policy will pay $5,000 to your lender, and you'll pay $500 for the deductible.

“It is especially valuable to those who put down very little on their new purchase, or those financing for very extended terms,” says Lynch.

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.

Survey scores were compiled based on a consumer survey performed as part of the 2025 Best Car Insurance Companies ranking and are based, with equal weighting, on customer satisfaction overall and with claims handling as well as whether they would recommend the company to others and whether they plan to renew with the company.

Third-party ratings from AM Best and the National Association of Insurance Commissioners were used along with the survey score and average rates to rank the best gap insurance companies.

FAQ: Best cheap gap insurance

What is gap insurance, and when do you need it?

Gap insurance covers the difference between what insurance will pay for your car in a total loss (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.) and what you owe on your loan. You should buy gap insurance if you have purchased a car with a small down payment or expect to be upside down on the loan for any reason.