No, auto insurance does not cover you against repossession if you have failed to make your car payments on time. Insurance covers you for issues such as property damage liability if you are in an accident and damage another vehicle or the medical payments of those you may have injured in an accident with bodily injury liability.

Other coverages one might have on a car, especially a car with a lease or loan on it, include collision and comprehensive. These physical damages coverages cover the car if it was damaged in an accident or due to such events as fire, theft or hitting a deer.

If your car was damaged during the repossession process and get the car back by catching up on your car payments then you should be able to place a claim for those damages with your insurance carrier.

A repossession of a vehicle due to non-payment or falling behind in payments is a financial issue and not an issue in regards of auto insurance coverage for a covered loss. Gap insurance would not cover the car either if it was repossessed and sold and you still owed money to your lien holder.