Originally posted by pdqgp
Unfortunately that is how things work out. Insurance doesn't pay replacement value for cars. Look into GAP insurance on your next loan if it's a larger amount. They may not offer it on used cars, but lots of lenders offer it on new car loans.
As a former dealer, I highly recommend it and pretty much insist it's part of a car deal if the vehicle is leased. It basically is a cheap insurance that pays the difference between what is owed on the car and what it's deemed worth by the insurance company. If I would have financed $26k for my accord, it would have only cost $400 or so.
Good luck on the new ride and consider yourself lucky that it was just a car and not you or a family member.
as far as i know... at least in CA... GAP insurance is mandated on all leases.