GAP insurance typically pays off the balance due on a vehicle's loan or lease after a vehicle has been deemed a total loss and actual cash value of the vehicle has been paid out first.

The tax side of GAP insurance or other auto insurance settlements is not our expertise so we would suggest that you contact a tax accountant or financial advisor for information on how this insurance claim payout could affect your income tax filing.

For information on GAP or other types of motor vehicle insurance coverage for your vehicle in any of 50 states, click here for a free auto insurance quote.