Does insurance help with buying a new vehicle if your car gets totaled?

In the event that your car is totalled and you have comprehensive coverage, your insurance provider will typically provide you with a cash settlement that is equal to the actual cash value (ACV) of your vehicle. This amount is determined by taking into account the year, make, model, mileage, and condition of your car, as well as any recent modifications or upgrades that you have made to it. However, it's important to note that the ACV may be lower than the amount that you originally paid for your car, especially if it was a new vehicle.

In some cases, you may also be eligible for additional coverage that provides "gap insurance" This type of coverage helps you bridge the gap between the ACV of your car and the amount that you still owe on your auto loan. If you have gap insurance, your insurer may pay the difference between the ACV and the outstanding balance on your loan, up to the agreed-upon limit.

It's important to understand the terms and conditions of your auto insurance policy to determine the exact level of coverage that you have and whether additional options like gap insurance are available to you. If you have any questions or concerns about your coverage, be sure to contact your insurance provider for more information.