What Happens if My Car Is Totaled in a Wreck?
If you find yourself involved in a car wreck in Florida, you’re likely going to have two main questions: (1) How do I get my medical bills paid and (2) how do I get my car fixed? This blog is going to address the latter question, primarily if the damage is extensive enough for there to be a total loss.
Florida statutes require the at-fault insurance carrier to cover the damage done to an injured party’s vehicle. The insurance carrier can either fix the vehicle, or if the cost of repair would outweigh the value of the vehicle, or repairs aren’t possible based on the damage, they will provide the total loss of the vehicle to the injured party. The insurance carrier is likely to choose the cheaper option.
Once a vehicle is deemed a “total loss,” the at-fault insurance company will make an offer for the “reasonable resale value” of the vehicle. This amount is not the equivalent of replacing the vehicle. The reasonable resale value is the amount a similar vehicle in the same geographical location would sell for.
If you own the vehicle outright without a loan, you provide title to the at-fault insurance carrier, and in exchange they send a check for the reasonable resale value. If you have a loan on the vehicle, the insurance carrier will pay off the loan and you will receive the remainder amount.
You may wonder, “What if I’m upside down on the vehicle?” A total loss on a vehicle where the loan is higher than the value of the vehicle is not ideal for anyone. If you have “Gap Insurance,” a coverage that is usually offered with the finance company when you purchase the vehicle the total loss value is sent to the loan company and the remainder of the loan is forgiven. Unfortunately, even though you no longer need to pay a loan for a vehicle that doesn’t exist, you are not provided any compensation to obtain a new vehicle.
If you do not carry gap insurance, you will still continue to owe on the remainder of the loan, and this is truly a worst-case scenario. You may need to discuss with your finance company about rolling the remainder of the loan into a new loan for a replacement vehicle. Obtaining gap insurance is inexpensive and something we highly recommend if you’re going to finance a vehicle.
Another option, assuming you carry the requisite coverage, is to go through the property damage portion of the claim with your own insurance. The process is the same with one exception. The reasonable resale value of the vehicle will be paid with a reduction for your deductible, whatever amount that may be. The good news is once your insurance company is able to be reimbursed eventually from the at-fault insurance, they will pay the deductible back to you.
The at-fault insurance’s only obligation is to fix what they broke or pay for what they broke if it’s unreasonable to fix it. Rarely does this leave the insured party in an equitable position.
There are some aspects of the property damage claim that can be complicated. Our office is here to answer any questions and provide guidance on the process. Spinner Law Firmprovides free consultations for all personal injury situations and will discuss your property damage situationin detail. Please reach out to speak with one of our experienced attorneys today.