Gap insurance typically covers the difference between the actual cash value of your vehicle and the amount still owed on your auto loan or lease in the event of a total loss. This means that if your car is stolen or totaled and you owe more on your loan or lease than your car is worth, gap insurance will pay the remaining balance. The amount gap insurance will pay is generally up to the total amount you owe on the loan or lease, minus any deductible and depreciation. However, it’s important to review the terms of your specific policy, as some gap insurance plans have limits or exclusions that may affect the payout. Generally, gap insurance helps prevent you from being financially burdened by a car loan balance you cannot cover due to the loss of your vehicle.