Loan/Lease Payoff coverage pays the difference between what you owe on your vehicle
and what your insurance pays if your vehicle is declared a total loss or stolen
and not recovered, less your Comprehensive or Collision deductible. Both Comprehensive
and Collision coverage are required before you can add Loan/Lease Payoff to your
policy.
You can purchase Loan/Lease Payoff coverage for vehicles that you lease or for which
you have an unpaid loan. This coverage is only available if your loan or lease is
held by a financial institution, not an individual.
After your Comprehensive coverage or your Collision coverage has paid you the actual
cash value for your vehicle, less your deductible, your Loan/Lease Payoff coverage
will pay the difference between the actual cash value and any additional amount
you owe under the terms of your vehicle lease or loan (excepting fees and charges).
However, the payment made under this coverage may not exceed 25 percent of the actual
cash value.