If you’re like most people, your car is one of your most valuable assets. But what happens if your car is in an accident and is deemed a total loss by the insurance company? Unfortunately, if your car is financed and the insurance payout is less than the remaining balance on your car loan, you may be left with a financial gap that you’ll need to fill out of your own pocket. This is known as a “gap” in coverage.
When you finance a car, you typically owe more than the car is worth for the first few years. This is because a car depreciates in value as soon as you drive it off the lot. If you’re in an accident and your car is considered a total loss, the insurance company will only pay out what the car is worth at the time of the accident, which is often less than what you owe on the loan.
How could I owe more than what the insurance company is offering to pay for my totaled car?
For example, let’s say you financed a car for $20,000 and you’re in an accident after one year. The car is now worth $15,000, but you still owe $18,000 on the loan. The insurance company will only pay out $15,000 for the car, leaving you with a gap of $3,000. This means you’ll need to come up with the $3,000 out of your own pocket to pay off the remaining balance on the loan.
Gap Insurance for total losses
Luckily, there is a solution to this problem: gap insurance. Gap insurance is an optional coverage that you can purchase when you finance a car. It will cover the difference between the insurance payout and the remaining balance on the loan, so you won’t be left with a gap.
What if I don’t have GAP insurance?
However, if you didn’tbuy gap insurance, and you are unable to pay the remaining balance on the loan, you can contact an attorney in California. They can review your insurance policy and loan agreement to determine if the insurance company is fulfilling their obligations and can also help you negotiate with the insurance company to try to increase the payout. If the insurance company is not willing to increase the payout and you are unable to pay the remaining balance on the loan, the attorney may be able to help you explore options such as filing a lawsuit or seeking a settlement. Also, an attorney may be able to help you with any disputes that may arise.
How will a contacting a personal injury attorney help if my car is totaled?
An attorney can help you recover full reimbursement for your medical care, lost wages, and all other injury-related expenses if you’ve been in an accident. They can help you navigate the claims process and make sure that you receive the full compensation you’re entitled to. This is particularly beneficial if you don’t have gap insurance, as it can be difficult to pay for medical expenses and lost wages out of pocket. An attorney can also help you negotiate with the insurance company to make sure you receive a fair settlement. They can also help you understand your legal rights and options and can represent you in court if necessary. By hiring an attorney, you can ensure that you receive full reimbursement for your medical care for as long as you need it, your lost wages, and all your other injury-related expenses, which can provide you peace of mind and financial stability during a tough time.
