When you finance a car, a lien is established, which serves as a claim to your vehicle and is used as collateral if payments are not made. Generally, when you finance a car, you make monthly payments to the entity holding the lien. This lien safeguards the lender, empowering them to reclaim the vehicle if you default on payments. But what happens to the lien if a car is totaled and insurance has to step in?

In an interview with Carinsurance.com, Producer Deece Catanzaro discussed the process and timing for an insurer to pay off the lien on a totaled car.

“It typically takes about 30 days for the insurance company to pay out the claim and pay off the lien on a totaled car. If the insurance does not cover the balance of the lien, the insurance company will pay off to the amount of insurance coverage listed in your policy,” he said.

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