 TITLE: What Happens if Your Car Is Totaled? CONTENT: Do You Still Have to Make Loan Payments on a Totaled Car?\n---------------------------------------------------------\nInsurance experts recommend continuing to make loan or lease payments until the insurance company sends the claim payment to your lender, even if you can't drive the car.\nOnce the lender is paid off, what if you still owe money on the car? Unless you have what's known as gap insurance, you're responsible for making up any difference between the claim payout and the loan or lease balance. So, let's say the insurance company paid out the totaled car's actual cash value of $25,000, but you owe $27,500 on the loan financing the vehicle. In that case, you're responsible for the remaining $2,500.\nSticking with that example, gap insurance that you buy on top of your standard coverage could fill the gap between the $25,000 claim payment and the $27,500 loan or lease balance. That means you wouldn't have to come up with the $2,500 difference on your own. Keep in mind, though, that gap insurance kicks in only when you've already got comprehensive and collision coverage. Gap insurance typically costs about 5% of your annual car insurance premium, according to AAA. END