If my car is totaled and not paid for will your insurance pay for it?

In most cases, insurance companies are only required to pay up to the book value of your car. What this means is that if you owe $15,000 on a car loan and the car is only worth $12,000, you will still be held responsible for the remaining balance which in this case would be $3,000. This is also known as being upside down. If you purchase GAP, a.k.a a debt cancellation contract, then you would not be held liable for the remaining $3,000. This is why it pays to purchase a car that has good residual value meaning it shouldn't depreciate much faster than you are able to pay off your loan.