How much is gap insurance in Wisconsin

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Gap insurance costs $1,760 annually in Wisconsin, which is $137 less than the national average.

Offered by many leading insurers, such as Travelers and Nationwide, gap insurance serves as a financial safety net for drivers who finance or lease a car. It bridges the gap between the vehicle’s actual cash value and the outstanding balance owed on an auto loan or lease if the car is declared a total loss, such as after an accident or theft. Your insurer may also call it loan or lease gap coverage.

Gap insurance rates vary by location, but in Wisconsin, you can expect to pay around $1,760 annually, which breaks down to about $147 each month.

What is gap insurance?

If your car is declared a total loss or stolen, gap insurance can help cover the difference between its actual cash value and what you still owe on your loan or lease. It’s an optional add-on, but it can save you from paying out of pocket.

When you finance a new car, it’s easy to overlook how quickly it loses value once you drive it off the lot. In many cases, you’ll owe more on your loan than the car is actually worth.

If your car is totaled, your insurer will reimburse you based on its actual cash value, not what you still owe on your loan. If your loan balance is higher than the payout, you’re responsible for covering that gap – unless you have gap insurance, which can cover the difference.

“When an accident or theft occurs, a driver usually gets paid out on the vehicle’s cash value from their standard insurance coverage,” says Richard Howe, a car accident attorney in Atlanta. “However, without gap insurance, you will still be on the hook for the remaining amount in your agreement. Gap insurance provides peace of mind to drivers that they will be financially protected.”

“For instance, let’s say your car is totaled and the actual cash value is determined to be $15,000. However, you still owe $20,000 on your loan. Traditional auto insurance would only cover up to the actual cash value, leaving you with a $5,000 deficit,” says Howe.

“But if you have gap insurance, this difference would be covered, relieving you of the financial burden.”

Average cost of gap insurance in Wisconsin

The cost of gap insurance varies depending on your insurance company, location and the type of car you drive. On average, gap insurance in Wisconsin costs $1,760 annually or $147 each month.

“Gap insurance is an optional coverage that is usually very reasonably priced, typically less than $100 per year in additional premium when added as an endorsement to your existing auto insurance policy,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute, an insurance industry trade group.

“Gap insurance rates are based on the amount of your loan or lease agreement. It is typically not based on other common rating factors such as credit record.”

Cheapest gap insurance companies in Wisconsin

In Wisconsin, Travelers provides the most affordable gap insurance, at $1,123 per year or $94 each month. On the other hand, Farmers has the highest premiums at $2,345 annually or $195 monthly.

The chart below shows the average annual cost of gap insurance from various insurers in Wisconsin.

How much is gap insurance per month in Wisconsin?

Gap insurance rates vary, but here’s what you can expect to pay for gap insurance every month:

Gap insurance rates in Wisconsin’s top cities

Gap insurance rates often depend on your location. The table below lists the average annual costs in major metro areas across Wisconsin.

Gap insurance rates for different vehicle types

Your gap insurance rate can vary depending on the make and model of your car.

“Luxury cars, sports cars, and SUVs – typically with higher purchase prices – might also come with higher gap insurance premiums. That’s because these vehicles tend to depreciate at different rates compared to standard sedans or compact cars, posing a greater risk to insurers,” Howe says.

The age of your vehicle plays an important role in how much you pay for gap insurance.

“Newer vehicles, which depreciate more rapidly in the first few years, represent a higher risk for insurers offering gap coverage. As a result, a brand-new car might attract a higher gap insurance premium compared to a model that is several years old,” Howe says. “This reflects the insurer’s risk assessment, considering the steeper depreciation curve and the greater likelihood of a significant gap needing coverage soon after the purchase.”

When does gap insurance expire?

If you’re financing or leasing your car, gap insurance is worth keeping. It can save you from paying out of pocket if your car gets totaled or stolen.

“However, Gap insurance is typically most relevant during the first few years of new car ownership,” Howe says.

That’s usually when you owe more on your loan than the car is worth.

“Most car buyers benefit from gap insurance when the vehicle is less than three model years old. This coverage is usually aligned with the duration of the car loan or lease, often making it unnecessary beyond a few years because the loan balance decreases to fall below the car’s actual cash value,” Howe says.

You can drop gap coverage once your loan balance exceeds your car’s actual cash value. Many insurers also drop this coverage after a certain number of years for the same reason.

Where to buy gap insurance

There are three main ways to get gap coverage, and each has its own pricing and rules.

• Your insurance company: Many national and regional car insurance companies offer gap coverage as an optional add-on to your auto policy, usually for $20 to $40 a year. Since it’s part of your car insurance policy, you can drop it once your loan amount is lower than the car’s actual value.
• Dealership: Many finance managers offer gap insurance, usually for $400 to $700. The charge is added to your loan, which makes it easy, but you’ll likely pay more in the long run because of the added interest amount.
• Banks and credit unions: Some banks and credit unions sometimes sell gap insurance as a standalone policy. It’s typically affordable, but cancellation policies differ – some will refund any unused premium, while others won’t.

Take time to shop around, compare prices, review cancellation policies and look for perks like deductible coverage. A few minutes of research could save you hundreds over the life of your loan or lease.

The bottom line

Gap insurance can be an affordable way to protect yourself from paying thousands out of pocket if your car is totaled or stolen. Rates vary by state, vehicle type, and personal factors, so it pays to shop around and compare quotes from multiple insurers.

Consider whether the age and value of your financed or leased car justify the added protection, and don’t hesitate to ask questions when reviewing policies – understanding the details now can save you a costly surprise later.

Methodology

Insure.com commissioned Quadrant Information Services in 2023 to get annual and monthly gap insurance rates for male and female drivers aged 40 who drive a Honda Accord LX with a clean driving record and good insurance score and carry a full coverage car insurance policy with limits of 100/300/100 and $500 comprehensive/collision deductibles.

To evaluate the rates, we have compared 53,409,632 insurance records from 170 insurance companies across 29,152 cities and 34,588 ZIP codes across the nation.

Shivani Gite

Contributing Writer

 

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Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions.

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