Losing one’s only vehicle in a crash can be very disruptive to daily routines and, to complicate matters further, if the car was financed with an auto loan and there’s still a balance on that loan, the financial repercussions could be severe. Here, readers can learn what a truck accident attorney with Dulaney Lauer & Thomas LLP can do if they still owe money on an automobile that’s been totaled in an accident.
Definition of a “Totaled” Vehicle
Every insurer has different rules in determining if an automobile should be written off as a total loss after an accident; however, in most cases, if the cost of repairs is more than a set percentage of the car’s value, it is considered a total loss. The average percentage used by most auto insurers is 80%.
By law, the auto insurance company is required to list the lien holder on the check as a payee to make sure that the proceeds go toward paying off the car loan. This step is required because banks and lenders that offer car loans have the right to be paid first out of total loss funds that are paid out by insurers.
If the Insurance Payment Is Insufficient to Pay the Loan Balance
As everyone knows, a car depreciates in value as it ages, with some cars depreciating faster than others. However, many people think that the car’s value is the same as what’s owed on a loan, and while this is true in some cases, those instances are rare. In the ideal circumstances, a total loss payment that comes after a trucking accident is for more than the amount of the loan.
Yet, if the loss check is less than the amount owed on the loan, the driver is still under obligation to make monthly payments until the car loan is fully paid. The fact of the total loss doesn’t change the terms of the loan, and the borrower’s legal obligation continues. The lender or bank still a right to repayment, even if the car is no longer in the borrower’s possession.
Trucking accidents often result in severe injuries and the total loss of the passenger vehicle. If someone loses their car in a commercial vehicle accident, they should talk to a truck accident attorney about their next steps.
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