Gap insurance and full coverage serve different purposes in auto insurance. Full coverage typically includes liability, comprehensive, and collision insurance, protecting against damage to your vehicle, other cars, and property in various scenarios, such as accidents, theft, or natural disasters. In contrast, gap insurance is specifically designed to cover the difference between what you owe on your car loan or lease and the actual cash value of your vehicle if it’s totaled or stolen. While full coverage handles the immediate costs of repairs or replacement, gap insurance steps in to cover the financial shortfall that might remain after your primary insurance payout, especially useful if your car depreciates quickly or you owe more than its current value.