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by ralljr on May 7th, 2005

ralljr

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A driver who had no insurance rear ended us. We had full coverage, but we still owe $4,000 and the insurance company is totaling the car and paying $2,000 leaving us a balance to pay. Is this right? I thought we had full coverage.

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Answers. 4 helpful answers below.

  • by Scifisuz on July 25th, 2007

    Scifisuz

    Your std auto policy pays up to the actual cash value of your vehicle (before the accident). They are not responsible for the diff between that and your loan balance. You are. Sorry.

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  • by Andy Is Wicked Married to Penal Colony on May 8th, 2005

    Andy Is Wicked Married to Penal Colony

    Full coverage is a term I tried to stay away from using when I was in the insurance business because it is somewhat misleading. "Full coverage" is what most people SAY they have when they have both comprehensive and collision coverage on the vehicle. However, in this case, it is likely your uninsured motorist liability coverage (under property damage) is where this claim is filed. Either way, my answer applies.

    If a vehicle is totaled, the insurance company is in no way obligated to pay you for what you owe on a car loan. They are only obligated to pay you for the car's actual value and that is probably spelled out in some manner in your policy.

    Uless you have lease/loan gap coverage on your auto insurance policy, you will only get the value of the car paid by the insurance company, NOT the balance of your loan. See http://www.answerbag.com/q_view.php/4371 for info on that. Usually this type of coverage is available in one of three places: as an optional coverage on your insurance policy, as a clause in your loan paperwork (that's where I had coverge), or a policy you purchased separately to cover a loan/lease gap.

    Unless the laws are different where you live, this is right unfortunately. Wish I ad better news for you, but I hope this answer helps make sense of it.

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  • by Anonymous on September 13th, 2009

    Anonymous

    We just bought a new 2010 Fusion on 7/30/09. On 8/30/09 a 17 year old rear ended our car. He was ticketed. He had been speeding and driving recklessly. Didn't see the line of cars stopped. Anyway, his ins. co decided our car is totalled. They have been struggling on how to VALUE our 1 month old car, however. They decided to ask us for our PURCHASE invoice. They deducted mileage from it. I need to know what rate they s/b using for mileage. Also, I have searched for another Fusion and can't find one for the same price as I paid. I got a good deal. Plus the rebates will be expiring soon. Should they pay us REPLACEMENT value or based on my cost? Why should I be out money? If I am, what is the likelihood I will win in court suing the kid. Won't they say that is why they had insurance?

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  • by kidbillrock on July 26th, 2007

    kidbillrock

    Yes insurance only pays out on the value of the car, not how much you owe or paid for it, and yes it sucks. However, depending on your state and auto insurance policy you may be able to sue the uninsured driver to offset your losses. For more information visit http://www.auto-insurance-knowledge.com/uninsured.html

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