Best Cheap Gap Insurance Companies in Minnesota: Quotes, Discounts (2023)

It can be difficult to fully understand all the different types of auto insurance you may need. In addition, the amount and type of auto insurance you need will vary depending on your location and your unique situation. So let's look at gap insurance specifically and talk about the ins and outs and whether you will need this type of auto insurance coverage if you live in Minnesota.

Drivers in Minnesota are looking for the best value in car insurance. So why not use Insurify to score free auto insurance quotes and compare coverage options? It’s so simple and only takes a few minutes.

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Best Companies for Gap Insurance in Minnesota

If you've determined that you are a good candidate for gap insurance, you will want to find an insurer that offers comprehensive coverage at a fair price. Here are some of the cheapest auto insurance providers for leased cars in Minnesota to help you get started.

See More: Cheap Car Insurance in Minnesota

What is gap insurance?

“Gap” is an acronym for guaranteed asset protection. Gap insurance is intended for drivers who total their vehicles in an accident and owe more than the car is worth. Gap insurance covers the physical damage part of your auto insurance policy (comprehensive and collision).

The insurance company will only pay out the vehicle's actual cash value, so this is where gap insurance comes in. It fills in the "gap" if you have a total loss and pays the lender the difference between what the insurance company pays and what you still owe on the vehicle.

Who should buy gap insurance in Minnesota?

When considering whether gap insurance is a good idea for you, there are a few key considerations to keep in mind. First, gap insurance may make sense for you if:

• Your lender requires it.

• You’re leasing your vehicle.

• You financed your vehicle loan over 60 months or more.

• You put less than 20 percent down on your car (or didn’t make a down payment at all).

• Your loan has a high interest rate.

• You rolled over negative equity from your last auto loan.

• You’re driving a luxury vehicle or other high-value vehicle that depreciates faster than a standard car.

Minnesota Gap Insurance Laws

Gap insurance is available in Minnesota, but it is not required by law. According to Minnesota insurance statutes, a creditor may offer gap options paid for in a single payment or a monthly payment plan. If you choose not to purchase gap insurance, you will be required to sign a guaranteed asset protection waiver that is included in the finance agreement.

How much gap insurance do I need in Minnesota?

You only need gap insurance if you owe more to the finance company than the car is worth. How much gap insurance you need is the difference between what you owe and how much the vehicle is worth.

See More: How Much Car Insurance Do I Need?

How Gap Insurance Works in Minnesota

When you finance your new car, either through your bank or a car dealership, you'll likely be offered gap insurance along with other types of coverage like roadside assistance while completing the paperwork. Gap insurance will pay off the balance still owed on the vehicle after your insurance company has paid its part if your car gets totaled.

The insurance provider pays the lender the market value of the vehicle after processing your claim minus your deductible (the dollar amount you pay up front in a claim). If the insurance company's payment does not cover what you owe on the vehicle, your gap insurance will pay the lender the difference.

How Much Gap Insurance Costs in Minnesota

The average cost for car insurance that includes gap insurance in Minnesota is $171 per month, which is less than the national average of $289. Compared to the lowest price for gap insurance of $122 in New Hampshire and the highest cost for gap insurance of $495 in Michigan, Minnesota falls on the lower end.

If you own an older vehicle and you don’t owe much on your loan balance, then you may not need to purchase gap insurance. However, if you have a new vehicle financed for a long term (more than 48 months), gap insurance may give you peace of mind, especially if paying off the car will cause a financial burden for you after a total loss.

See More: Average Cost of Car Insurance in Minnesota

How to Buy Gap Insurance in Minnesota

You can buy gap insurance in the state of Minnesota by buying it from the dealership during your vehicle purchase, where it will be added to your loan payments, or by adding it to your insurance policy.

If you are a Minnesota driver, you are better off using Insurify to compare car insurance quotes and policies to find the best deal on gap insurance that will satisfy all your requirements. No matter whether you live in St. Paul, Minneapolis, Duluth, or Mankato, Insurify can help you find the best deal on auto insurance.

Frequently Asked Questions: Gap Insurance in Minnesota