How is what you owe on the car the insurance companies problem? They are there to make you whole, not make you whole and kick down extra. If that was the case we would all be upside down since all we have to do is have an 'accident' and the car will be fully paid off. They will give you what the car is worth, make sure you not only check kbb but also the local newspaper and autotrader as it could be worth more or less in your area.

In the future, don't borrow so much, if you do, get GAP.