What you may not know is that most car insurance claims are based on an Actual Cash Value (ACV) basis. This means the replacement cost value of the car minus depreciation.
As several drivers out their finance their cars – the amount their vehicle depreciates may not necessarily equal the amount they owe on their loan. So in the event of a claim, the amount paid out by the insurance company might not be adequate enough to pay off your car loan.
This is where auto loan/lease coverage comes in to play (also referred to as gap coverage). I quoted a client gap coverage on their truck today, and it was only an extra $8 per year.