Nearly a year later, your “new car” is totaled out.
You file a collision claim with your insurer and find out that the actual cash value Opens a New Window.
of your vehicle is only $19,200.
This means after your $500 deductible is taken out, your car insurance company will pay out $18,700 to your lienholder.
How much does gap insurance pay on a totaled car?
You have an accident while you are still upside down on your loan or lease (meaning you owe more on a car than it’s worth) and your vehicle is totaled out. The insurance company determines that the actual cash value of the car is only $22,000, but at the time of the loss you still owe $23,500.
Photo in the article by “President of Russia”