Gap and insurance are not the same, although gap coverage can be part of an insurance policy. Insurance generally refers to a broad range of products designed to protect individuals or entities from financial loss due to specific events, such as accidents, theft, or natural disasters. Gap insurance, specifically, covers the difference between what a car is worth at the time of a total loss and what the car owner still owes on their loan or lease. While standard auto insurance policies cover the vehicle’s actual cash value, gap insurance ensures the owner isn’t left paying out-of-pocket for a car they no longer have. Therefore, gap insurance is a specialized add-on to a traditional insurance policy, focusing on the financial gap that can arise in auto financing scenarios.