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 Posted: Fri Dec 07, 2007 1:58 am Post subject: Car was totaled...and we owe more then it's worth. |
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I was involved in a non at-fault accident. My car was a total loss and we owe more then it's worth. Does the insurance company pay the lienholder or do they cut us a check? Also...if they cut us a check are we obligated to pay off the lienholder. I don't have money for a car payment and am screwed right now as for getting a new vehicle. What happens to the car when it's a total loss? Canwe also get money for the salvage of the car?
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#Confused
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| Posted: Fri Dec 07, 2007 4:12 am Post subject: |
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| I believe they will cut a check to the leinholder on the policy, if you owe more than the blue book then you will have to pay the balance. I purchased a gap insurance when I bought my new car to avoid this situation. If my car is a total loss and the blue book is lower than the payoff this gap insurance will jump in and pay the difference so that I can start fresh with it paid off. |
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goodnatured
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Juanita
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| Posted: Fri Dec 07, 2007 7:28 am Post subject: |
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| Quote: | | Does the insurance company pay the lienholder or do they cut us a check? |
It can be either way, the insurer can put the lien holder's name on the check or can write it to you. But you need to clear the unpaid amount of the loan. I agree with goodnatured, the gap insurance is the only possible solution when you are in such upside down situation. Find it out with the lien holder, he might have taken out a gap policy on that vehicle. If that is so then you are lucky this time….got it 
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roddick
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| Posted: Fri Dec 07, 2007 11:38 am Post subject: |
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Good morning confused, and welcome to the community...You have got some pretty good advise, but I'm going to try and clear up a couple of minor things.
First the insurance company owes you only the ACV (actual cash value) of your vehicle NOT what your loan balance is....ACV is determined many different ways, but I know of no insurance company that uses the kelly blue book...so this is an incorrect assumption good natured, (sorry, i think you mean that they owe the ACV and just mis-spoke re:blue book)... | Quote: | | if you owe more than the blue book |
, some companies use NADA, some Edmunds, others still have computer programs they purchase such as ccc or valuemate...the bottom line is the ACV is what they will pay...
| Quote: | | It can be either way, the insurer can put the lien holder's name on the check or can write it to you. |
This is also incorrect if the vehicle is totaled and there is a lein holder on the vehicle then it will NOT be made out to just you...it may have your name on it, but it will also have the lein holders name...You see YOU do not own the car, the lein holder does, and only the lein holder can release the title (clean) to the insurance company...so they can dispose of the salvage.
| Quote: | | if they cut us a check are we obligated to pay off the lienholder |
I can't imagine a situation that they would pay you directly, but why would you ask this question? Would you feel no obligation to pay the note ?
| Quote: | | What happens to the car when it's a total loss? |
Typcially what happens is the insurance company contacts the leinholder, gets a GOT (guarantee of title (release) along with a payoff (if less than ACV)..The insurance company will communicate to your lein holder the amount that they will pay for the title...now if your leinholder will not release the title for that payment, (and of course you are still responsible for the balance) then the insurance company will pay your leinholder your vehicles ACV MINUS the salvage value. In effect the leinholder (and you indirectly) are retaining or buying back the salvage. And leaving you yet still more on the note...most leinholders will release the title to the insurance company (so the insurance company can sell the salvage), this in no way however releases you from the balance on the note.
| Quote: | | Canwe also get money for the salvage of the car? |
In your case no, I doubt it, legally anyway...
Talk to your lein holder and see if you have GAP insurance you might! If so then no worries, (unless of course you had prior unrepaired damage, and you could still be on the hook for that).....
Let us know if we can be of further assistance... |
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Lori
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| Posted: Fri Dec 07, 2007 7:56 pm Post subject: |
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| Great job Lori, you covered everything, I wanted to ask you, do you work for an insurance company or have you in the past? I have seen hint of this in your writing, did not want to look stupid asking though. You cover each subject so thoroughly, thanks for the great advice. |
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goodnatured
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| Posted: Sat Dec 08, 2007 10:58 am Post subject: |
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| Quote: | | I wanted to ask you, do you work for an insurance company or have you in the past? |
Yes, good natured I'm an adjuster and have been in the 'claims biz' for 21 years....
| Quote: | | You cover each subject so thoroughly, thanks for the great advice. |
That's very kind thank you.. |
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Lori
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| Posted: Tue Dec 11, 2007 11:16 pm Post subject: |
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| Thought so, you know your stuff, hopefully I won't have to ever ask you anything, ha ha. |
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goodnatured
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| Posted: Mon Oct 06, 2008 4:27 pm Post subject: |
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lienholder is allowing me to keep my check for my totaled veh but how do i get someone to tow it without the title to it
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sa
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| Posted: Mon Oct 06, 2008 4:33 pm Post subject: |
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I am really surprised the leinholder is letting you keep the check.. When I was in an accident the bank had to be paid first then I got the remaining. Maybe the plight of your situation helped.
I never knew you had to have the title to tow a vechicle. I have had many towed and never needed one. Is it in a salvage yerd and did you ask the actual lienholder how to go about this? |
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fireyone
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| Posted: Mon Oct 06, 2008 5:11 pm Post subject: |
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yes the lienholder advised they did not handle that part of it, and I was trying to give it to the junk yard because it is totaled
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SA
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| Posted: Mon Oct 06, 2008 5:11 pm Post subject: |
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yes the lienholder advised they did not handle that part of it, and I was trying to give it to the junk yard because it is totaled
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SA
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| Posted: Tue Oct 07, 2008 12:26 am Post subject: |
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I don't understand where you are wanting it towed from and to?
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Lori
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| Posted: Tue Oct 07, 2008 12:33 am Post subject: |
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Good question I never thought to ask that. Around here people would haul it for free because there is alot of money in junk cars. It is usually the ones who don't like 9-5 jobs (if ya know where I'm coming from). So they go around asking people if they want the old cehicle removed.
I can say one good thing it sure cleaned up the neighborhood rather quickly. |
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fireyone
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| Posted: Tue Oct 07, 2008 1:12 am Post subject: |
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How about donating it to the local high school auto class? They will get to work on something and you will get the tax write-off.
Not to mention, you'd be really cool doing that.
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LifeIsGood
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