Being in a car accident is stressful, but it's even worse when your car is totaled in Ventura, CA, and you owe more on your auto loan than the vehicle is worth. This situation means you are "upside down" on your loan.
What Does "Totaled" Mean? In California, a vehicle is typically totaled when the cost to repair it exceeds its actual cash value (ACV) or a certain percentage of that value (usually 70% or more, depending on the insurer).
What Will Insurance Pay? Insurance companies only pay the ACV of your car at the time of the accident, not what you originally paid or what you still owe.
- If someone else was at fault, their insurance pays the ACV.
- If you were at fault or the driver was uninsured, your collision coverage (if you have it) pays the ACV.
The Gap Problem: If your loan balance is greater than the ACV (e.g., you owe $19,000, but ACV is $15,000), you are responsible for paying the difference ($4,000) out of pocket.
GAP Insurance
GAP (Guaranteed Asset Protection) insurance covers this "gap" between the car's worth and what you owe. If you don't have it, you must pay the remaining loan balance yourself. If you are also injured in the collision, our Ventura personal injury lawyers can help you with your claim.
For a free consultation about your injury claim, contact our Ventura, CA office, Richard | Bartlett Lawyers, today. Call us at (805) 438-2440 or visit our website.