Gap car insurance covers a driver when he has a total loss on a vehicle and the insurance company benefits don't pay off the balance remaining on his loan. The gap policy kicks in and covers the difference to protect the owner from having to pay the difference himself.
People who lease vehicles are good candidates for gap insurance. However, people who buy a new vehicle that is likely to depreciate quickly may want gap as well to cover them while underwater on a loan. People can buy gap insurance through a dealership or purchase it through an insurance provider. Buying on the open market from an insurance company often leads to the lowest premium.