Quick Answer: How Does Gap Insurance Work If Car Is Totaled?

Quick Answer: How Does Gap Insurance Work If Car Is Totaled?

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” http://en.kremlin.ru/events/president/news/60795