Auto Insurance
Gap Insurance
Auto coverage that pays the difference between what you owe and your car's value after a total loss.
Last reviewed: May 2026 · Editorial methodology
Definition
Auto insurance that covers the difference ('gap') between what you owe on a financed or leased vehicle and its actual cash value at the time of a total loss. Essential for new cars that depreciate quickly in the first 1–3 years. Without gap insurance, you can owe thousands on a totaled car that your standard collision coverage will not pay. Typically costs $20–$40/year added to your auto policy, far cheaper than buying it from the dealer.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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