Auto Insurance Forum

I was recently in a car accident and the other driver was at fault. His insurance company doesn't want to pay off my car that he totaled. Should his insurance company pay off my car and buy me another?

Stacy, California

Dear Stacy,

While the insurance company must give you fair market value for your vehicle, it is not required to pay off any leases or loans that you have on your vehicle.

Lease or loan gap insurance pays for any outstanding money that you owe on your vehicle if it is declared a total loss in an accident. If you don't have this insurance, you are stuck paying what you owe on the vehicle to the lender.

For more information, read Save yourself some grief: Buy lease or loan gap coverage.

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