Our Mobile car accident attorneys know that a serious car accident can disrupt your whole life. In the aftermath, you may be faced with overwhelming circumstances that you have no clue how to handle. You or your loved ones may suffer severe injuries or substantial property loss. Even if you walk away with minor cuts and bruises, the insurance company can decide to total your car—even if you’re still making payments. You could be stuck with a substantial car payment and no way to get to work or take care of your responsibilities.
Total Loss Vehicles
Every insurance company is a little different when it comes to deciding whether a wrecked car is a total loss or is repairable. Usually the vehicle is considered a total loss when the cost you pay in repairs exceeds a certain percentage of the value of the vehicle.
If the insurance company decides that your vehicle is a total loss, they will send you a check for the value of the car. The check will be addressed to both the policy holder and the lien holder so that the money must go to paying off the loan.
In many cases, the value your insurance company places on the vehicle may be lower than you think it should be. Cars do depreciate in value, but many insurance companies will not consider any upgrades you have made. Even if your car just happens to be dirty when the wreck occurs, the insurance company may say that it is worth less because of poor condition.
High Loan Balance
Another reason the insurance company may value the car at less than the payoff of the loan can be simple mathematics. Depending on the terms of the loan, your car may depreciate faster than the loan is paid off. Insurance companies value your car based on market conditions rather than the payoff amount. Many different factors can affect market value that you may not have control over, including:
- Reputation of the car maker
Even if you no longer have your car, you still have to pay off your loan. If you think the value of your car has been unfairly decided, don’t hesitate to contact the Mobile office of Long & Long’s car wreck attorneys. Please call us at (800) 672-8518 for a free legal consultation or complete our contact form below.