Anything can happen at any time, but it doesn’t eliminate the shock when you’re involved in a car accident. When another driver isn’t paying attention to the road or fails to adhere to the laws associated with driving, they put your life in danger. They also put your car in harm’s way, and many accident victims worry that their car is a total loss. For many people across the country, their car is necessary to their everyday life. If you live in a rural community in which public transportation is not available, you probably cannot live without a vehicle. The wait to find out if your car if a total loss following an accident is excruciating.
If your car is not a total loss, it’ll be repaired and paid for by the insurance agency handling your case. If the insurance adjuster calls to tell you your vehicle is a total loss, it can mean several things depending on your personal situation. Here’s what happens if your vehicle is a total loss.
You’ll Get Fair Market Value
If you live in a no-fault state or the other driver had no insurance, your insurance agency is handling your case. This means they’re paying you for the damage to your car, which is a total loss in this case. If the other driver’s insurance is handling the case, you’ll hear from them when the insurance adjuster makes his decision regarding the status of your wrecked vehicle.
If your vehicle is a total loss, the insurance adjuster is going to offer you a fair market value check. They will go online and look up the fair market value of your exact vehicle to determine the amount they owe. That’s when they’ll cut you a check and be finished with the entire process.
If You Owe Money
If you do not own your car outright, the insurance company will issue a payout to the lender that holds your car note. The excess is then given to you so you can use it to buy a new car. There is no law stating you have to use this money to purchase a new car, but it’s a recommendation. If you owe money on your car and you owe more than the fair market value, you have a few issues to contend with. First, you won’t get more from the insurance agency, and you could end up making a car payment for the remainder of the vehicle’s loan.
If you can’t afford to pay off the difference and lose the payment on a car you no longer have, you’ll be required to continue making your monthly payments as issued until the car is paid in full. The other problem lies in the fact that insurance companies can keep your car once they issue you a check for fair market value. They do this so they can sell it off for parts to recoup some of their money. You could be left with no car, a payment, and no way to get through this difficult financial situation.
Your best bet is to purchase GAP insurance on any new car you buy. This is available through the dealership when you purchase a car. It’s a flat fee that’s added into the price of the car, and it is used to cover the difference, or gap, between the fair market value of the car and what you actually owe on the car.
If you don’t have GAP insurance and you want to file a lawsuit, call an attorney. We can help you decide whether a lawsuit is a wise decision or not something you’ll win based on the facts associated with the accident. You should never suffer financially because someone else caused a car accident and cannot pay for the damages that have been done to your vehicle, and we want to help you fight for your rights. We can file a lawsuit to seek damages and compensation, and we can help you get the car paid off in full so you can purchase a new one for your family. You need a vehicle, and someone else’s negligence shouldn’t cause you to go without.