If you’ve been involved in a car accident, you’re probably going through a pretty stressful time – even if no one was injured. Those stress levels are higher for people who were financing a car at the time of the accident, and that vehicle is no longer operable.
What happens then? What if you can prove the accident wasn’t your fault, but you still have payments left? And what if you owe more on the car than it’s actually worth? Will you still be able to file an insurance claim? Will it be enough to take care of what you owe?
These are serious, serious matters, ones that can really have a negative impact on your finances. One thing you should never do is to talk to an insurance company adjuster right after an accident. Insurance adjusters are skilled professionals who are committed to helping their employers pay as little for insurance claims as possible. They will use your words against you in an effort to reduce the amount of money you can get.
You should speak with an attorney with The Jones Law Group instead. We will talk to insurers on your behalf, and do everything we can to make sure you get the compensation you deserve. If you would like a free consultation, please contact us online or call (727) 571-1333.
What Happens if You Crash Your Car, but it Hasn’t Been Paid Off Yet?
As much as we love our cars, the unfortunate truth is that they depreciate, as you well know. They actually start to go down in value the second you drive the car off of the dealership’s parking lot. So even though you owe a certain amount, that doesn’t mean the car is worth that amount.
There are instances where someone involved in a car accident will receive an insurance check for more than the amount that remains on their loan. They can pay off the loan, and have some money left over.
However, if you’re not that lucky, then you could be in a bind. If the amount you receive from the insurer is less than what you owe, then you’ll still be obligated to continue making monthly payments. Even if you can no longer drive the vehicle.
Explaining “Total Loss”
When a car is severely damaged in a wreck, an insurance company will often say it’s “totaled”. In other words, the vehicle’s at a total loss. In Florida, if the cost to repair a car is more than 80% of its actual cash value (ACV), then the car will be deemed a total loss.
Let’s say the ACV of your car is $10,000. A mechanic says repairs will cost $8,500. Your insurer will total your car because it will cost more than $8,000 (80% of $10,000) to fix it. On the other hand, if the mechanic said it would cost $7,500 to fix the vehicle, then the insurer would probably give you the money to do so.
What is GAP Insurance?
If you have GAP (guaranteed auto protection) insurance, then you’ll be covered for the difference between the ACV of your car and the amount you still owe. For instance, if the ACV of your car is $20,000 but you still owe $30,000, your GAP insurance will cover the difference. The problem is that most people don’t carry GAP insurance because it’s very expensive.
There are some people who think their PIP (personal injury protection) insurance coverage will cover them if they’re in a car wreck. PIP will provide coverage if you or another person is injured in an accident. However, it does not cover property damage. You’ll either have to:
- Use your regular insurance policy
- Pay for that damage yourself
- Take legal action to get money from the person who caused the accident
Can You Receive Compensation for a Car that Hasn’t Been Paid Off?
If you haven’t paid off your vehicle and it has been totaled in an accident, your options are fairly limited in regard to going through insurance companies. Even if the other driver was to blame, and you file a third-party insurance claim against that driver’s insurer, it will still only pay for the ACV of your vehicle. If you owe more than the ACV, you’ll still need to pay your lender.
The problems will only get worse if you’re not covered by automotive insurance. You’ll not only have to pay off your existing loan. You may also have to pay for the other driver’s property damage if you are sued. There’s also a chance you could lose your driver’s license.
You may, however, have an option – sue the other driver if you weren’t to blame for the wreck. Of course, you’ll have to be able to prove that you weren’t at fault, so you’ll need evidence. This could be photos or videos taken at the scene of the accident, the police report, or witness statements. You’ll also need to have certified estimates showing the cost of the damage done to your vehicle.
More than likely, your case would be heard in small claims court. Small claims cases involve amounts that total $8,000 or less, and are heard in the court of the county where a dispute takes place. It usually takes about one or two months until a small claims case is heard. If you choose to go this route, you’ll be able to subpoena witnesses. These include not only the other driver, but also the insurance adjuster assigned to your claim.
In order to have the best chance of winning this type of lawsuit, you’ll definitely need the help of an experienced attorney. Your attorney could possibly convince the insurance company to increase the amount of money it’s willing to pay. No attorney will ever ethically be able to promise this kind of result, of course, but it could be possible.
Contact a Car Accident Attorney for More Information
A personal injury attorney with the Jones Law Group may be able to help you obtain the compensation that could help pay off your vehicle if you’ve been involved in an accident. Call (727) 571-1333 or use our online form to learn more.