My friend's car was totaled in an accident recently, will her insurance pay off her car even if...?

FFD911

If she had full coverage, which is usually required by the lender, and she didn't miss payments on her insurance premium, then insurance would cover the cost.

oklatom

One has nothing to do with the other. If she hasn't been making her payments, they are obviously looking for her to get her to do as she promised. If her car is totaled, and the accident is not her fault, no, the other insurance won't pay it off. That isn't what insurance does. Insurance will give the lender fair market value of the car. If that doesn't cover what she owes, she will continue to make payments until the balance reaches zero, unless she has GAP insurance. If she does, that will bridge the "GAP" and pay it off, LESS the payments she is behind. GAP insurance doesn't reward you for not fulfilling your obligations.

Luna & Lawnboy

You friend will get the Actual Cash Value for the vehicle. If it covers the loan, great, she is all set. If she owes more than the ACV, she/you are still responsible for the difference. You better hope that she was making her insurance payments.

bam....

If she was up to date on her car insurance, I think they would have to pay for the car, but that doesn't mean they will pay the car off, allot of people get gap insurance, which I bought for my son on his second car. He totaled his first, was hit by a drunk driver, the insurance company paid it in full them some, but we had only had it 2 months. The second car we bought the gap , so if the car was wreck and not worth what was Ode, the gap paid for the remainder of the loan.

mbrcatz

No. INsurance doesn't cover "payoff", normally. It will pay actual cash value of the car. Likely, she's still going to owe them money, after the insurance pays out.

It doesn't matter whose insurance pays - they only pay actual cash value. Not payoff, not the cost to buy a new car.

Tell her next time, pay cash for an old junker - then she doesn't need to worry about payments.

Sheemes

I dont think that would matter, the insurance company will just pay her blue book for the car. She will owe the rest.

Scott v2.0

The insurance company will only pay they values of the car, assuming it is totaled. Any balance greater than that owed to the bank is still the responsibility of the person who borrowed the money.

Sara's Man

i can tell you right now the insurance companies fraud department are going to be all over this, as it looks very bad. That said, if the insurance is current, and no fraud exists, they will pay. Insurance and car loan are separate.

-Kelli-

No i don't think so! She should phone them up herself and explain the situation, probably need to pay it off first x

smartalec02

As long as your friend is still the legal owner of the car, and the insurance is still covering your friend as a driver on the car... yes. Still covered. The billing dispute is between you and the person your friend is buying the car from. Legally, an insurance company cannot insure a car the insured person does not own. So, unless the dearship has taken ownership of the car... she's good.

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