Total loss payment didn’t pay off my car loan. Can a second claim be made?

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No, you’re entitled to the actual cash value of your car, not what you owe on your car loan..

Auto insurance claims settlements are meant to make you whole by putting you financially into the same place as you were before the accident.

Unfortunately, you had negative equity in your vehicle (owed more than it was worth) so being paid its worth the moment before it was crashed may not feel like being made whole. You ended up with a gap of what the value is and the balance due on your loan, which is your responsibility alone to pay for – unless you have gap insurance.

Gap insurance is additional coverage that you can carry when you owe more than your vehicle is worth and if the car is totaled it will pay the difference between your vehicle’s ACV and your loan balance so you aren’t left still paying on a car you no longer can drive.

Penny Gusner

Contributor

Penny is an expert on insurance procedures, rates, policies and claims. She has extensive knowledge of all major insurance lines -- auto, homeowners, life and health insurance. She has been answering consumers’ questions as an analyst for more than 15 years and has been featured in numerous major media outlets, including the Washington Post and Kiplinger’s.