No, the death of the policyholder is not normally covered under GAP insurance.

You should read through the terms of your GAP insurance and speak to your Gap insurer to get a definite answer but normally a gap policy does not cover the balance of your automobile loan or lease if you, the policyholder, die.

A standard Gap insurance policy would come into play and cover the balance of your lease or loan after your physical damage policy for collision or comprehensive coverage has paid out the actual cash value (ACV) due a covered total loss of your vehicle.

A total loss of a vehicle typically comes after a car is severely damaged in an auto accident. It can also be declared to be totaled by an insurer if your motor vehicle is stolen and damaged or stolen and unrecovered.

If the policyholder dies and still has a loan or lease on the vehicle then the estate or next of kin of that person would typically need to see about taking over the loan or lease, turning the car back into the lien holder, etc. They would also need to contact the insurance company and notify them of the death and either transfer insurance over to the person taking over the car or canceling out the policy.