Car Totaled Without GAP Insurance

What happens when your car is totaled with no GAP insurance, you still owe on the loan, and you're not at fault? If you still owe on your auto loan after receiving your totaled car's cash value, you must finish paying it off. Gap insurance can minimize those costs and may cost as little as $20 more annually. If your gap insurance covers only part of what you owe, you'll be responsible for any leftover costs. Save money on gap insurance now.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Jan 27, 2021

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What You Should Know

  • GAP insurance can help protect you from owing more than your vehicle is worth should an accident occur.
  • If your car is totaled but you still owe money on your loan, you must finish paying it off.
  • Insurance companies consider a car totaled if the repairs cost 51 percent more than what the vehicle is worth.

What happens when your car is totaled with no GAP insurance, you still owe, and the accident was not your fault. What do you do? Do you still have to make payments on a totaled car

Many Americans choose to finance their vehicles for financial reasons. Often the loan term lasts for a few years. But have you ever wondered what happens to those payments if your car gets totaled, you still owe, and it’s not your fault?

So your car got totaled, and, yes, you still have to pay off the remained of your loan. Keep reading to learn what you can do to minimize costs and replace your car when your car’s totaled, you still owe on loan, and have no insurance.

Secure cheap auto insurance rates to protect yourself from a totaled car by entering your ZIP code into our FREE tool above.

What happens when your car is totaled and you still owe money?

What happens if someone totals your financed car is the same as any other vehicle involved in an accident. If your car is totaled and you’re not at fault, first call emergency services if anyone needs medical care. File a police report and take photos of the accident for investigation purposes. Then call your insurance company to make a claim.

The insurance claims adjuster will provide you with the actual cash value of your car. If you still owe on your auto loan after receiving your totaled car’s cash value, you must finish paying it off.

An online total loss car value calculator can help you estimate these totals.

Vehicles depreciate quickly, some faster than others. The Insurance Institute for Highway Safety reviewed the insurance loss of car models bought between 2016 and 2018. The data analyzes the frequency of claims and the average loss payment per claim.

See how your vehicle compares in the table below. A lower percentage is better.

Comprehensive Auto Insurance Loss Percentage by Vehicle Make and Model
Vehicle Make and ModelComprehensive Auto Insurance Loss Percentage
Ford F-150-41%
Toyota Corolla-17%
Ford Mustang Convertible12%
Lexus RX 350 (4dr)15%
Nissan Altima20%
Volkswagen Golf R 4WD26%
Toyota Camry35%
Toyota Prius35%
GMC Sierra 1500 (crew cab) 35%
Nissan Maxima
59%
Volvo XC90 (4dr)61%
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If you drive a Ford F-150 or a Toyota Corolla, your insurance losses are well below average. Toyota Prius drivers take a much bigger loss. Sports cars and luxury vehicles have the worst annual insurance losses in the IIHS report. If your car’s been totaled, you’re not at fault, but still owe more than the vehicle was worth, keep reading to learn what your options are.

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Do I still have to make payments on a totaled car?

If you owe more for your car loan than the total loss car payout, the loan does not disappear. Unfortunately, you do still have to make payments on a totaled car.

What happens when you total a financed car without insurance?

If you have no insurance, your car is totaled, and you still owe on the loan, you will not receive the actual cash value to help pay for the lost vehicle.

It doesn’t matter if it’s a new car totaled and you’re not at fault or a financed car totaled and you’re not at fault. Whatever amount is left on your loan, you must finish paying off yourself.

Investing in GAP insurance can help prevent this from happening to you, which we discuss later on.

Do you still have to pay insurance if your car is totaled?

Fortunately, you do not have to pay for auto insurance for a car that’s totaled if you still owe, and it’s not your fault. Even if it was your fault, you no longer need to pay for insurance because the vehicle is no longer drivable.

Can you refinance a totaled car?

Unfortunately, no, you will not be able to refinance a totaled vehicle. Once your bank or loan provider learns your vehicle has been totaled, they will send you an invoice for the remainder of what you owe with a clear due date.

Plan ahead if you can. Many banks will not allow totaled vehicles to have outstanding loans for very long.

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How do I find out if I have GAP insurance?

If your car is totaled and it’s not your fault and you still owe money on it, check if you have GAP insurance. GAP insurance specifically helps pay off the loan for vehicles that are destroyed or stolen.

You can check your auto insurance policy and look at the terms of your loan to see if you’re covered by GAP insurance.

Diamond Edwards discusses in more detail who should purchase GAP insurance and why it is important in the following video.

If at any point during your loan, you think you might owe more than the vehicle is worth, GAP insurance is worth your while. Paying a little each month will save you thousands should a collision occur.

The Insurance Information Institute says adding the extra coverage through your insurance provider may cost as little as $20 more annually.

If your GAP insurance covers only part of what you owe, you’ll be responsible for any leftover costs. However, you’ll still be better off than if you were in a car totaled, no GAP insurance situation.

Do I have to accept the insurers’ offer on a totaled vehicle?

If you’re not happy with your total loss car insurance settlement, you can negotiate for a higher rate with the insurance company. However, it can be difficult to get the company to agree to your desired amount.

You may also be wondering about how to fight an insurance company’s totaled car assessment. How an insurance company calculates a total loss is by comparing the cost of repairs to the value of the vehicle.

If repairs exceed 51 percent of the vehicle’s value, most companies call it totaled. Some stretch that amount to 80 percent.

You can hire an independent appraiser to assess your vehicle’s damage. Sometimes, a private appraisal convinces a company to change its mind. If that doesn’t work, law experts at NOLO say your only other option is legal action.

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Frequently Asked Questions: Car Totaled, Still Owe, Not My Fault

Now you know what to expect if your car is totaled and you still owe money on the loan. Refer back to this guide as much as needed. Or check out our frequently asked questions below.

#1 – Can I sue the person who totaled my car?

Someone totaled my car – can I sue them? Yes, but you’ll only get back the cash value of your vehicle.

#2 – Can I buy my totaled car back from the insurance company?

Yes, you can keep your car if it’s totaled. The insurance company will subtract the total value of the salvaged parts from the car’s total cash value.

#3 – How to get a new car after total loss?

You will have to follow the normal process of buying a new car after experiencing a total loss. Budget for what you still owed on your previous loan, and consider adding GAP insurance to your new vehicle.

Now that you know more about what happens when your car is totaled, you still owe money, but it’s not your fault, compare affordable auto insurance rates to protect you if your car ever gets totaled by entering your ZIP code into our FREE tool below.

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