“The best thing you can do is to start paying your loan again. Even though you are waiting for your gap insurance
claim to be processed, you are still responsible for your loan. To prevent it from impacting your credit any further, you’ll want to begin making payments again.
Since the loan is being sent to collections, reach out to the collections company. Let them know about the situation and set up a payment plan. You should also let your lender know that you will be resuming payments.
Your gap insurance claim should cover the amount of the loan when the car was totaled. You may be reimbursed for the additional payments that you will be making now.
It is important to remember that gap insurance normally does not cover interest or fees, so you may still be required to pay any late fees associated with your loan.