![\"car_insurance\"](\"https:\/\/mmil.wpengine.com\/wp-content\/uploads\/2014\/07\/car_insurance.jpg\")
<\/a><\/p>\nSo your vehicle just got hit and you are wondering if your vehicle will be considered a total loss by your insurance company.\u00a0 What are your legal obligations to your financial lender if you still owe money on your vehicle? What is total loss? \u00a0How will your insurance company calculate what the total loss is?\u00a0 Well bottom line, \u201cyou are still legally obligated to make your monthly loan payments to the bank or financial lender until the loan is paid off.<\/p>\n
First a total loss is defined when \u201cthe cost of a repair for an item (e.g. house, boat or car) is more than the current value of that item.\u00a0 It can also refer to an insurance claim that is settled for the entire amount of a property on the basis that the cost to repair or recover the damaged property exceeds its replacement cost or market value.<\/p>\n
So if your car\u2019s total repair cost is greater than the actual value of the vehicle your insurance company will declare your vehicle as a total loss and then write a check for your claim.\u00a0 When they write that check \u201cthe insurance company is required to include the lien holder as a payee on the check to ensure that the money goes toward paying off any loan you have on the car.<\/p>\n
Sometimes that check equals more then what you owe on the vehicle, which is great for you to pay off your liability expenses and may still have a possible down payment on a new vehicle.\u00a0 If the check is less than then the principal on the vehicle loan then you are still legally bound and have to call up your lender to possible renegotiate your debt.\u00a0 \u201cCar values are dictated by the open market, not by the loan amount,\u00a0and the value can have certain factors that affect it such as \u201cmileage and conditions of the car.<\/p>\n
A recommended preventative measure is to take out a gap insurance policy which is \u201ca type of auto insurance that car owners can buy to protect themselves against losses that can arise when the amount the insured owes on the vehicle\u2019s financing or lease agreement.<\/p>\n
Gap insurance policies are easy to take out when you purchase your vehicle, and you should consider it \u201cif you finance 80% or more of the car\u2019s purchase price, or if you roll past debt into the new car loan balance.<\/p>\n
It is important to know what your car is worth so that if you do get into a car accident you will be able to negotiate with your insurance company if they determine that your vehicle is a total loss or not.\u00a0 To find the fair market value of our vehicle you can check websites like Kelly Blue Book value; www.kbb.com<\/a>; Edmunds; www.edmunds.com<\/a>; or the National Automobile Dealers Association; www.nada.com<\/a>.\u00a0 Do not forget the mileage and condition of the vehicle as that is an important variable in considering the actual car value.<\/p>\n If you have been in an accident it is imperative to \u201cimmediately contact your insurance company and file a claim,\u00a0which \u201callows the insurance company to begin determining the fair market value and the costs of repairs on your vehicle.\u00a0 \u00a0If you have gap insurance on your vehicle you should \u201ccontact your lender and have the lender file a claim with the gap insurance provider.<\/p>\n Determine your vehicles actual value and look up if your state dictates what the damage ratio is for your vehicle; the ratio will be read out in a percentage.\u00a0 Do not forget that if the vehicle is considered a total loss, and if the check received from your provider is not greater than the principal on the vehicle, you are still obligated for the rest of the liability.<\/p>\n Author Bio:<\/strong><\/p>\n David Incorvaia recently graduated from the University of Florida Law School<\/a> specializing in property law. He frequently gets questions about personal injury in addition to the questions of how vehicle destruction impacts loans comes up, and in those cases he often refers his clients to David Heil, PA<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" So your vehicle just got hit and you are wondering if your vehicle will be considered a total loss by your insurance company.\u00a0 What are your legal obligations to your financial lender if you still owe money on your vehicle? What is total loss? \u00a0How will your insurance company calculate what the total loss<\/p>\n","protected":false},"author":1923,"featured_media":14512,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[62,64],"tags":[],"class_list":{"0":"post-14511","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"category-finance"},"aioseo_notices":[],"modified_by":"James W","_links":{"self":[{"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/posts\/14511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/users\/1923"}],"replies":[{"embeddable":true,"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/comments?post=14511"}],"version-history":[{"count":0,"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/posts\/14511\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/media\/14512"}],"wp:attachment":[{"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/media?parent=14511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/categories?post=14511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/makemoneyinlife.com\/wp-json\/wp\/v2\/tags?post=14511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}