If your down payment was less than 20%, you may owe more than your car is worth. If your car is totaled or stolen, gap insurance can help you pay off the balance of the loan. ... You may be required to purchase gap insurance if you are leasing a vehicle.

Gap insurance is an additional insurance policy that is offered on vehicle loans. Gap insurance policies do not replace your primary auto insurance policy, but instead provide coverage over and above your primary auto insurance policy. 

Gap insurance is an optional, add-on car insurance coverage that can help certain drivers cover the “gap” between the amount they owe on their car and the car's actual cash value (ACV) in the event of an accident.