Gap insurance can help you cover the “gap” between the financed amount owed on your car and your car’s actual cash value (ACV), in the event of a covered incident where your car is declared a total loss. For example, if you are in an accident and your car is totaled and you owe $18,000 on the auto loan, but your car’s ACV is only $15,000, gap insurance would help cover the $3,000 difference (minus your deductible). So if you owe more on your car than it is worth, you may want to consider this optional coverage.