Car wreck insurance question?

They would not pay the balance. They would not replace the car. They would issue a check to you *and* to the lien holder for the "Fair market value" (actual cash value) of the car on the day it was wrecked. If the check is for more than what you owe, the lien holder will send you the balance after they take what you owe. if the check is for less than you owe, you will have to keep making payments until the loan is completely paid off.

They give your lender the blue book value of what it's worth, less your deductible, the portion of their ownership of that car. Then you receive the portion that you've paid them already. (They write you a check) If you still owe the lender money, then they get to keep that, unless you have GAP insurance. You might check with USAA, I was under the impression that USAA automatically adds GAP insurance to their vehicle loans. State Farm does in theirs too, with no extra fees. So you wouldn't have been paying extra for it -- it is included.

Frankly I don't know why more people don't know this. It's a no brainer to finance your car with somebody that provides GAP insurance, at no extra cost. I'm hoping I'm right that USAA does this too.. Do ask. Good luck.

Neither. The insurance company is only allowed to pay what the car was worth when it crashed, minus your deductible. They do not replace the car. The amount of the loan does not affect what they pay. If the car was worth more than you owe, then they pay off the loan, and pay you the rest of the value of the car (minus your deductible and what you owed). If the car was worth less you owe, then they pay off an amount equal to the value of the car, and you pay the rest of the loan.

You will get wholesale value for the car minus your deductible IF you have collision insurance on your policy.

You will have to speak with your insurance agent to see if they pay the lien holder directly for the outstanding amount or if you have to pay them yourself.