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When your car is declared a total loss, your insurance company pays you the actual cash value (ACV) of your car, not the amount you still owe on your loan. If you owe $25,000 but your car is worth $20,000, that $5,000 difference is called negative equity, and unless you have GAP coverage, you’re responsible for paying it out of pocket. 💡 Tip:GAP coverage can protect you from that financial hit by covering the difference between what you owe and what your car is worth. It’s especially important
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