What happens if someone totals your car in an accident and it was their fault, does their Insurance pay loan?

speedwell

Most insurance companies will pay FAIR MARKET VALUE.

There are a number of different methods by which insurance companies determine fair market value. Book value, is one of those methods, however there is no guarantee that your carrier will use book value. Additionally, your perception of "excellent condition" may differ from the appraiser looking at your car.

If your car is totaled, the insurance company is not obligated to pay off your loan. They are only obligated to pay the fair market value of the car. There are a number of reasons for this:

1) an insurance company has no control over the conditions by which you finance your car. Eg. if you have bad credit and finance a car at 28.8% interest. Or you purchase a car over the MSRP.

2) depreciation varies from car to car. Eg. a Ford Taurus will depreciate faster than a same year Toyota Camry. Therefore the market value for the Ford will be less than that of the Toyota, even if you purchased them at the same time for the same price.

If the actual cash value (fair market value) of the vehicle exceeds the amount of your loan, then yes, the insurance company will pay your loan, then send you a check for the positive equity (balance of the acv).

Stayathomemom.com

It can depend on where you live and what insurance policy you have.

We thought we were covered - our suburban was totalled in a 60 car pileup. We were car 24 and so clearly not at fault - we got it from in front and behind and all around. Fortunately no one was hurt ( the car took the full brunt of the collision.)

After the collision our insurance company called saying they could send us a check for $4000. That wasn't even blue book never mind paying off the existing loan and being able to find a replacement vehicle.

It took me over three months of hassling with the insurance company ( and I do mean hassling ) for them to even accept paying us out the blue book value.

Unfortunately, like you, we didn't really look into the full ramifications of our insurance policy until after the accident. But here is my advice now that you are in that situation.

1. more than likely your insurance company will tell you that all they can give you is this one ( low ball ) amount. They will tell you that this is what your policy covers and they will try to get you to take it. Do not rush into accepting the first "offer" they give you. Make sure to insist on getting the full amount allowable by your policy.

2. stay calm and take your time. Hopefully everyone was fine in the crash but find out how long of a time you have to report any injuries. Our insurance company paid to have us see our doctor and we were able to get right in - but we were still in shock basically. So, if there are any cases of whiplash or other things that might show up later you will not be covered.

3. get your own info. Check out the blue book etc.
most insurances will only pay for a replacement car at your cars current status. They will not cut you a check to go out and buy a brand new SUV.

Good Luck! Hang in there and get ready to haggle.

Thunderdog

They won't pay the loan off only market value of the car.

entidtil

They will give you "Fair market value" for the car. Fair market value has nothing to do with what you may owe on the car. Their check will go to your lien holder. If it isn't enough to pay off the loan, you still have to pay until the loan is satisfied. Your car will not be replaced unless you replace (pay for another one) it.

Michael S

Generally, book value is payable. You might well owe more than that might cover as a result of interest charges on a loan. Any excess from the book value versus settlement of the debt is down to you!

la428282

Please explain to me why they would pay off your loan AND give you money for a new car lol? Insurance is to get you back in pre-loss condition- NOT BETTER THEN PRE LOSS!

If they both paid off your loan AND gave you a new car you would now NOT have a car payment. AKA- You would be WAY better off then before the accident.

They only owe you "actual cash value" of your car. This means what it is selling for right now. It has nothing to do with what you owe.

lucy

Speedwell is correct;
To find the value of your 2004 SUV, check our Edmunds.com.
This gives you the cost to sell or replace your SUV.
Never, never look at blue book, since no company pays by that value, that is only dealer value off of a lot.
say for instance, your suv is worth 10k, and your loan is 12k. the insurance company will pay you 10k and you owe your loan company 2k for the difference in your loan.
the value of your suv is what it was worth prior to your accident and no more.
the only way to get full value for your auto and loan is through your insurance policy for a new replacement and most policies only have 6 months to a year only. they also have maximum mileage to replace in these cases. so for instance, there is a 100k mileage and a 1 year on the policy, if at 10 months, you have 100,001 in mileage, you no longer have full replacement coverage.
hope this makes sense.

ERIC B

Maybe You should google it at first hand ,nevertheless, if you like some direct resource ,here http://www.Autoinsurancepro.info/auto-insurance-free.htm should be helpful.

Scott H

Not exactly. The insurance company is only obligated to compensate you for the actual cash value of your vehicle. If that's enough money to pay off your loan, then great. If not, then you pay the difference. The value of your vehicle and how much you still owe on it are 2 very different things. How much you owe on isn't the insurance company's problem, it's yours.

Jay P

It depends on where you live and what the insurance laws are. Where I live, collisions are considered "no fault" which means your insurance looks after your vehicle, regardless of whom is at fault.

ANDY

Hello

Normal you get paid book value of your car.
Unfortunately this is going to be less than the loan you took out to pay for it.
Your first action would be to pay off as much of the loan as possible then getting another loan to cover what you still owe and enough for another car.
Bare in mind that although paying back loan early you will pay the full amount including all the interest. On average the first 2 years on finance is paying the interest only then you start paying off the cost of the car.
If you pay over the book price when you bought it, it will make no difference now as today's book price is what you will get paid.

To be honest I think this is why people fake injuries to get more money apart from the value of the car to help pay off a loan that through no fault of there own they can't repay after settlement.

Andy C

Brendan Y

There are lots of places where you can get a free insurance quote. http://www.simpleautoquotes.com/Auto-Insurance.html It only takes less than 10 minutes to do.

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