Insurance Money Doesn’t Cover Car Loan
Have you been in an accident, your car was declared a total loss, but the insurance company won’t give you enough money to pay off your loan? If this is the case, there are a few things you can do to get more money for your car, narrowing or eliminating the gap between what you receive from the insurance company and what you owe on the car.
To give you some background, your own insurance company has a contract with you in which it is obligated to pay you the Actual Cash Value (ACV) of your vehicle if it is totaled. If the other driver was at fault for the accident, then the insurance company of the at-fault driver will have to pay your insurance company for any money your insurance company pays to you for the total damage to your vehicle.
With that said, if the insurance company, either your insurance company or the at-fault driver’s, is not offering enough money to pay off your car loan, here are a few steps you can take to possibly raise the value of what you have lost, thus entitling you to more money for the damaged vehicle.
- If you recently put new tires or other expensive equipment on your car, send the receipts to the insurance company to raise the value of what you have lost. Do the same with anything else of value that you had done to the car before the car accident.
- Go on the internet and look at car sales websites to find similar year, make, model, condition and tire wear to your vehicle that was declared a total loss. See if the Actual Cash Value of your vehicle was actually higher than what the insurance company is saying.
- If you find your car was worth more, send that information to the insurance company and show them that they are not offering enough money to pay you the actual cash value of your vehicle. If that vehicle is selling for an amount of money that’s higher than what you need to pay off your loan, then you can hopefully get the amount of money you are entitled to.
- If your car was totaled you are going to have to purchase a replacement car. When you do, you should ask your insurance company for a price quote to add to your policy a provision that will pay off any loans on the car that you have. You will probably find out that the cost of such extra insurance coverage is quite low and well worth the price.
If you have been in a car accident, please call me to discuss it. We handle problems like this one all the time for people and can often get the problem resolved quickly. Our phone number is 949-496-7000. I look forward to helping you with this issue.