As you are likely aware, Gap insurance can give a car owner valuable protection during the early years of an automobile's loan or lease when you may owe more on the vehicle than actual cash value would be if it was involved in an accident where it was declared a total loss.

If a loss occurs, GAP insurance typically pays the difference between the actual cash value of the car and the current outstanding balance of your lease or loan. Some GAP policies will also pay your regular insurance deductible as part of the claim as well.

As for the premium that you pay for GAP insurance on your vehicle, if your GAP coverage is offered by an insurance carrier through your Personal Auto Policy then they have filed the premium calculation with your state's insurance regulatory body. The premium is then paid as part of your total auto insurance premium payment.

If your GAP policy is offered by an individual carrier, then typically gap insurance is provided by an AM Best "A-" rated insurance carrier. The premiums are filed and allowed by each individual state's department of insurance. These are usually paid as an annual payment.

Comment Update: Please see our related question titled "What is GAP insurance?" That will provide you the answer you are seeking.