“If you get into an accident and don’t have gap insurance
, you will need to pay whatever you owe on your loan after the other driver’s insurance pays out. Once the other driver’s insurance company determines the actual cost value of your vehicle, they will issue a check. Normally your insurance will work with the other driver’s insurance, so they may receive the check first.
From there, they will pass it along to you or send it to your lender. Since your vehicle is financed, it may be a requirement of your loan that the funds be applied directly to your balance.
Should there still be a balance after the payout, you’ll need to continue to make your loan payments until it is paid off. “