Insurance companies work on a ACV (Actual Cash Value) basis... Which means the value of the vehicle is based on the market for that particular vehicle. If the payoff on the lease or buy is less than the ACV the left over amount goes to you. If it is the opposite and you owe more than it's worth then you have a problem. Some folks will roll that into the new vehicle but then you are in the hole to start. Anyone who has negative equity to start or is leasing a vehicle should look into GAP insurance it is relatively inexpensive and is great in these situations.