Is there a type of insurance I can purchase that will cover the 60 months of my car loan?

You might be thinking of gap insurance, which is designed to fill the gap between what the insurer would pay out for a totaled car and the amount you owe on the car. It's worth considering when you purchase a new set of wheels because the vehicle's value falls as soon as you drive it off the lot.

If you were in an accident shortly after purchasing the car and the vehicle was totaled, the insurer would pay you the car's actual cash value in most cases. The actual cash value could be hundreds, even thousands, of dollars less than the remainder of your lease or loan.

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Within the first year, a car loses an average of 11 percent to 20 percent of its value, according to the National Automobile Dealers Association--that's $2,750 to $5,000 for a car that costs $25,000. Without gap insurance, you'd still be financially responsible for the balance of your auto loan.

Many car lease contracts include gap insurance, and some car insurance companies sell gap insurance but don't heavily promote it. Some insurers who sell gap coverage offer it only to customers who bought brand-new cars and who also purchased comprehensive and collision coverage. Others sell the coverage for vehicles of any age. Most gap policies include a cap for how much they pay out.

Meanwhile, some insurers have introduced policies that provide replacement cost coverage if your car is totaled. The Chubb Group of Insurance Cos., for instance, recently added replacement cost coverage for new vehicles to its policy. If in the first year, the car is totaled as a result of a covered loss, you can buy a comparable replacement vehicle with virtually no out-of-pocket expense.

For more, see Save yourself some car insurance grief: Buy gap coverage.