My Car Was Wrecked But I Still Owe Money On It: What Happens Next?
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When you have a serious car accident, you will be dealing with injuries and the possibility of missing an extended period of time from work. While this will be stressful enough, you will also have to start facing the realization that your vehicle may be considered a total loss. However, you may still be making payments on the vehicle, which can create a complex situation financially and legally. Should you still owe money on a vehicle that is considered a total loss, there are specific things you must do to avoid finding yourself in additional legal turmoil. To get your questions about this answered by an experienced attorney, meet as soon as you can with a Los Angeles personal injury attorney affiliated with Grey Law.
Determining a Total Loss
In the world of total loss insurance, most insurance companies use specific formulas to determine if a damaged vehicle is a total loss. Most of the time, this means if the repair costs exceed a certain percentage of the vehicle’s value at the time of the accident, the company will declare it to be a total loss. Generally, the benchmark used by most companies is 80%. For example, if your car is valued at $10,000 and it will need repairs totaling at least $8,000 or more, the insurance company will likely refuse to authorize repairing the vehicle. If you feel the insurer has made an error in declaring your vehicle a total loss, you can take legal action by working with a car accident lawyer from Grey Law.
Getting the Check
If the insurance company has declared your vehicle to be a total loss and you agree with the assessment, you will instead receive a check from the insurance company for the amount equal to the vehicle’s value when the accident took place. However, while it will have your name on it as a payee, it will also have the name of the bank or finance company that held the loan on your vehicle. As for why your lender’s name is also on the check, it is due to the fact that the lender is legally entitled to be paid first from any money you receive from an insurance company. If a dispute arises over this, talk over the specifics with a car wreck settlement lawyer Los Angeles residents know has experience dealing with insurance companies, such as David Grey of Grey Law.
You’re Not Off the Hook
When many people are involved in car accidents that result in a total loss, they mistakenly believe they are off the hook in regards to paying off their loan. But as you can see, that is certainly not the case. Thus, once you do receive your check from the insurance company, it is crucial you use it to immediately pay off the loan. If you try to use the money for other purposes, you may find yourself facing additional legal consequences, along with still being expected to pay off your lender. Rather than make an error in judgment and find yourself dealing with even bigger problems, trust a car accident personal injury attorney at Grey Law to give you sound advice and guidance along the way.
What if the Payment Is Not Enough?
Unfortunately, many people also mistakenly assume the check from the insurance company will automatically be enough to pay off their loan. However, that may or may not be the case. Since vehicles often depreciate quite quickly, it is very possible the amount of money you think you deserve and what you actually get will be two very different amounts. When looking at the values of vehicles, these are set by the open market rather than loan amounts. This, coupled with the vehicle’s mileage and condition at the time of the accident, also play a significant factor. If you are lucky, you may get a check that covers the remainder of your loan and leaves you some money left over for yourself. Yet no matter what, you are still legally obligated to pay off the loan, regardless of your circumstances. If you disagree with the amount of money given to you by an insurance company, you can hire an traffic collision lawyer in Los Angeles to represent you and challenge the insurance company’s findings.
In some instances where there is a difference between the amount of money you receive from an insurance company and the amount remaining on your loan, gap insurance may be your saving grace. Since this type of insurance will cover any differences in this area, you may be able to breathe easy. However, many people do not have gap insurance as part of their coverage. To determine if you do, you will need to carefully examine your insurance policy or speak to your insurance agent. If you do have gap insurance but find the insurance company is refusing to honor your policy for whatever reason, don’t sit back and allow yourself to be intimidated by a large corporation. Instead, hire a Los Angeles-based personal injury lawyer. Once you have a lawyer from Grey Law working on your case, the insurance company will know you are serious about getting positive results regarding this matter.
The Fine Print
When it comes to loan agreements and insurance policies, there is always a great deal of fine print that is rarely if ever closely examined by customers. As a result, there may be clauses that could or could not be to your benefit. To find out the specific details and how they apply to your situation, it is best if you hire an accident lawyer Los Angeles accident victims know has in-depth knowledge of auto insurance cases, such as car wreck attorney David Grey.
Since your lender may still be expecting thousands of dollars from you, hire an accident lawyer in Los Angeles who may be able to negotiate a reasonable settlement on your behalf. To find out what happens next, call a Los Angeles injury attorney at Grey Law.
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