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Arizona recorded more than 121,000 motor vehicle crashes in 2024.[1] Since a serious collision can result in a total loss, some Arizona drivers could be stuck making payments for a vehicle that’s undrivable after a crash if the payout is less than the remaining balance.
Gap insurance is an affordable coverage option that helps pay some or all of the difference between your insurance payout and your loan. Here’s what you should know about gap insurance in Arizona.
More than 121,000 car crashes occurred in Arizona in 2024.
Nearly 29% of Arizona drivers have a loan on their vehicle, and nearly 3% have a lease.
Auto-Owners has the most affordable Arizona gap insurance rates.
Before buying gap insurance, it’s important to shop around for the best rates, since pricing and coverage limits vary by insurer. Compare average auto insurance quotes for insurers that offer gap insurance in Arizona.
Gap Insurance Company | Average Monthly Quote | Best For |
|---|---|---|
| Auto-Owners | $2 | Low rates |
| Novo Flex | $2 | Safe drivers |
| Progressive | $3 | Coverage flexibility |
| User Reviews | 4.3 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 8.2 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $49/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $84/mo |
Auto-Owners's score | Industry average | |
|---|---|---|
| Coverage options | 4.0 | 3.2 |
| Customer service | 3.7 | 3.6 |
| Discounts | 3.5 | 2.9 |
| Policy transparency | 4.0 | 3.1 |
| Value | 3.5 | 2.9 |
Customers appreciate the friendly service and quick claims process but dislike the constant rate increases and perceived inflexibility in pricing.
Auto-Owners offers some of the cheapest gap insurance rates in Arizona, at an average of only $2 per month. Its average monthly full-coverage rate is also relatively affordable in Arizona.
Cheap rates in Arizona
Offers various policy discounts
Numerous coverage options available
Low Better Business Bureau (BBB) customer ratings
Online quotes not available (must speak with an agent)
Mixed reviews for claims handling
Novo Flex is a digital auto insurer that offers competitive rates for people with clean driving records. Since Novo tracks your driving habits, the safer you drive, the lower your premiums can potentially be.
Competitive rates for safe drivers
Digital-first car insurance experience
Discount of up to 25% for enrolling
Tracks your driving behavior (hard braking, rapid acceleration)
Your rate can go up if your driving habits change
Limited insurance offerings
| JD Power J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale. | 614 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 8.7 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $63/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $106/mo |
Customers appreciate the insurer’s good customer service and initial affordability but dislike the consistent price increases and complex claims process.
Progressive’s loan/lease payoff coverage is similar to gap insurance, as it helps cover the difference between your car’s value and your auto loan balance. Progressive will pay up to 25% of your vehicle’s value, though limits vary by state.
Competitive rates
Customizable coverage
Numerous discounts available
Loan/lease payoff coverage capped at 25% of vehicle’s value
Below-average J.D. Power customer satisfaction rating in the Southwest
Low BBB customer review score
The “gap” in gap insurance stands for “guaranteed asset protection.” This optional coverage helps you repay your remaining loan or lease balance after a covered total loss, such as a car accident or theft.[2] It covers the gap between the payout you receive for your vehicle and the amount you still owe. Arizona doesn’t require gap insurance, but many lenders require it if you lease your vehicle or have a loan.
Here’s how gap insurance works in Arizona:
Your insurer declares your vehicle a covered total loss.
Comprehensive or collision coverage pays out your vehicle’s actual cash value, minus any deductible.
Gap insurance covers some or all of your remaining loan or lease balance, depending on the policy.
Full-coverage policies average $163 per month
Arizona gap insurance generally ranges from $2 to $6 when added to an auto insurance policy, though rates vary by insurer.
Some of the cheapest insurers for gap coverage in Arizona are Auto-Owners and Novo Flex. Adding gap coverage to your existing auto policy is typically cheaper than purchasing stand-alone coverage.
Gap insurance covers the difference between your vehicle’s actual cash value and the outstanding balance on your auto loan or lease after a covered loss. Gap insurance applies only when your car is declared a total loss, typically due to an accident or theft.
It doesn’t cover the other driver’s property damages or bodily injuries — you’ll need liability coverage for that.[3] It also doesn’t pay to repair damage to your vehicle or cover your injuries.
For example, let’s say you get into a car accident and total your vehicle. Your insurance company determines that the actual cash value of your vehicle is $10,000, but you still owe $12,000 on your car loan. In this case, you would put the $10,000 settlement toward paying off your loan, and your gap insurance would cover the $2,000 difference.
Keep in mind that some gap insurers cap the payout amount. For example, Progressive will pay only up to 25% of your vehicle’s value, but the exact amount varies by state.
What Gap Insurance Covers | What Gap Insurance Doesn’t Cover |
|---|---|
|
|
You may need gap insurance even if you have full coverage. Full-coverage policies generally include liability, collision, and comprehensive coverage. But they typically don’t cover the gap between your car’s value and your loan balance. Gap insurance helps pay the difference.
Coverage Feature | Full Coverage | Gap Insurance |
|---|---|---|
| Covers repairs | Yes | No |
| Covers loan/lease gap | No | Yes |
| Covers injuries to other drivers | Yes | No |
Gap insurance isn’t required under Arizona law, but some drivers purchase it for extra financial protection. Gap insurance generally makes sense if:
You lease a vehicle and your lender requires it.
You owe a large amount on your auto loan.
Your loan balance is higher than your car’s value.
You made a small down payment on your car loan.
Gap coverage might also be a good idea for Arizona drivers who live in areas with high theft rates. In 2024, more than 17,000 vehicles were reported stolen in Arizona, according to the Arizona Department of Insurance and Financial Institutions (DIFI).
While you may need gap insurance now, it’s likely you’ll be able to drop coverage eventually. Gap insurance isn’t necessary if you own your vehicle outright. And you likely don’t need it once you’re close to paying off your loan.
Find a policy with gap coverage
If you’re looking for gap insurance in Arizona, you have several options. Compare the places that offer gap insurance and whether it’s typically sold as add-on coverage or a stand-alone policy in the table below.
Gap Insurance Source | Pros | Cons | Add-On or Stand-Alone? |
|---|---|---|---|
| Car dealership |
|
| Add-on |
| Auto insurance company |
|
| Add-on |
| Bank |
|
| Add-on |
| Credit union |
|
| Add-on |
| Online insurer |
|
| Either add-on or standalone |
Explore the answers to these frequently asked questions about Arizona gap insurance below.
The state of Arizona doesn’t require gap insurance. But if you finance or lease your vehicle, your lender might require it, at least until you pay down your loan balance.
Gap insurance as a car insurance coverage add-on ranges from $2 to $6 per month in Arizona.
You may need gap insurance even if you have full coverage. A full-coverage policy covers only the current actual cash value of your car, not your total auto loan amount. If you owe more on your loan than your car is worth, gap insurance helps pay the difference after a total loss.
It depends. Gap insurance isn’t a state requirement in Arizona. But individual lenders, such as banks, credit unions, and car dealerships, may require gap insurance when financing a car in Arizona.
If your leased or financed vehicle is totaled or stolen in Arizona, gap insurance covers the difference between the car’s value and your loan or lease balance. Without gap insurance, you could end up still making payments on a vehicle you’re unable to drive or may no longer have.
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AFCPE Accredited Financial Counselor
6 years experience in the personal financial industry
Featured in
Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Featured in
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 21630969
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