Anyway, let us begin:
Okay, tempting as it is to have a do over, I pretty much have that totally wrong. Sorry, internet community readers that only skim the first paragraph here before passing on to something more scintillating. Far from meaning that a space is needed, it means that something is missing and needs to be added . It comes out of Latin carere, to lack.
Secondly, though in my mind's eye, I was seeing it above the line, like this: ˆ, it is just as likely to be used below, like this:˰ . You can put the missing material, such as an apostrophe or a comma, under the mark, over the mark or in the margins.
A caret might also be confused with a circumflex (which means "bend around") such as Ê, which is placed over a letter to distinguish its pronunciation in some way.
Carets actually have a lot of uses. They are used as notation in mathematics, computer programing, logic, music and social networking, and have strayed very far from their original meaning of missing. I could break it down for you, but you may as well, just go to the source.
Perhaps the most interesting thing to me in these researches is that caret is related through this Latin origin to "caste", because in addition to meaning 'to lack', also means 'to be cut off from' or 'separated'. This incidentally is also the connection to 'castration'. Whoa.
As Peter Rozovsky made this request, and one aspect of this was to know whether there was a keyboard command for this symbol, I will finish with these. I am not totally sure I understood his question correctly, but if you want ˰, you type 02F0 and then hit alt+X. If you want ˆ, you type the Crtl key plus the caret key over 6 and then hit the Space bar. At least this is how you do it in Windows. I don't know if this is a uniform thing or not.