If your vehicle is declared a total loss by your primary car insurance provider, then you should notify your gap insurance carrier to make a claim again your gap policy.
As you are aware, gap insurance pays the difference between the actual cash value (ACV) that your primary insurance company will pay out for your totaled vehicle and the balance of your loan or lease.
In very simplistic terms, if you owe $15,000 but your vehicle is now only worth $10,000, that is what your primary insurance company pays out to your lienholder. Your gap insurance provider should pay the remaining $5,000 that is still due to your finance company.
You normally must make two separate insurance claims in this situation. The first claim is with your primary car insurance company. The second is with your gap insurer.
There is a time limit to file your gap insurance claim, usually 60 to 120 days after your primary insurer settles your claim. If you fail to inform your gap insurer in time of the total loss of your vehicle and settlement with your primary insurance company, you may lose out on your gap insurance monies.
Keep documents from your primary insurer about the settlement you came to with them for the value of your car since your gap insurer may request this.
Remember, until your loan or lease balance is paid off by settlements from your primary insurer and gap insurer, you are still required to keep up with your car payments.
If your agent is not able to explain to you what to do in this situation or fulfill your car insurance needs, contact a CarInsurance.com agent and they can explain not only insurance terms and explain claim procedures but also tell you how they can get you low cost car insurance.