Car Totaled w/ Comprehensive Coverage...what should i do??

Submitted by Trevin on Fri, 06/01/2007 - 06:15

Hey, may name is Trevin and I just recently got back from Afghanistan. I've had a car on lease and I have about $3000 left to pay off on it. It was worth $11,000 and its a 2001 Dodge Status SE so book value is probably around 5,or 6 thousand or so. Anyway, while I was overseas I had my car in Comprehensive coverage inside my garage, well, my younger brother decided to go joyriding because I left the keys with my mom overnight so she could start it up in the winter. He ended up hitting a pole trying to avoid a dog in the street, anyway the car looks totaled, airbags went off, and it looks like the damages cost more than the value to me anyway, this happened almost a yr ago and I just happen to be lucky enough to just find out about it. So I have a bit of an issue, no claim has been filed and my insurance company has no idea of what happened. So financially, am I better off calling the wrecker to haul the car away and pay off the remainder of the car and cancel insurance when it's paid off? Or file a claim for somethin that happened almost a yr ago and see what happens. I've got a feeling I'm better off hiding it and payin the car off and calling it a day, but I just wanted to make sure and ask somebody that may know something that could help me out before doing this.....

Posted: 04 Jun 2007 07:11 Post Subject:

I doubt that they will entertain you claim at all. You had the accident a year ago and had not informed the insurer that time where in case of auto insurance you need to file the claim ASAP.

In my opinion, you better pay off the remaining and cancel the policy.


Posted: 05 Jun 2007 12:25 Post Subject:

I'm a little confused... you only had comprehensive coverage and no collision? Only collision would address this loss as a pole was struck. Also, your family did not tell you of this until you discovered it a year later? Why? Did they think you might not need to know during that time or might not have noticed the caved in front hood? IMHO- not a smooth move.

If you have collision insurance, I'd report the accident to your insurance company. You can explain that you were overseas and no one told you about the accident. In any case, you need to keep paying the loan on the vehicle as that is a separate obligation. What would it cost to repair the vehicle? Perhaps you would want to have it repaired. If your brother knew he was not suppose to drive your vehicle and he caused the damage, why not have him pay for the repairs or have him make installment payments to you for the total amount of the damage? Seems only fair and a good lesson/character builder.

If you are going to drive the vehicle, you need to keep the insurance. If you are not going to drive it, drop the insurance.

Posted: 05 Jun 2007 09:12 Post Subject:

thanks 4 your responses guys, i think ima just pay off the loan as quickly as possible and drop the insurance, the vehicle would be considered totaled if i did report a claim, theres too much damage.

Posted: 09 Jun 2007 02:20 Post Subject:

Be very careful dropping insurance on a vehicle without notifying the department of motor vehicles. In Arizona, if you drop insurance on a vehicle, even if it is undriveable, it will probably give dmv reason to believe you are driving uninsured, and possibly will result in an SR22. That you don't need. They do not know it is damaged and undriveable. They will assume you are simply driving uninsured. Informing them will solve any potential problems.
Other states may have different rules, but that is Arizona.

Posted: 05 Sep 2007 11:59 Post Subject:

Many states have this rule, Gary - Virginia is one of them. I was the victim of clerical error that caused my drivers license to be suspended in Virginia when I moved from Virginia to Michigan. Knowing I had to inform the Virginia DMV that I had moved, I packaged up my VA drivers license and license plates, complete with a letter detailing my new address, etc. and sent it off to the VA DMV as soon as I obtained my Michigan license and plates. Off I went on my merry way, driving, driving, driving. For 5 years.

Imagine my shock when I went to the Michigan Secretary of State's office to renew my driver's license when it expired on my birthday 5 years later, and was told it couldn't be renewed because my license was suspended in Virginia!! I was dumbfounded, to say the least. I immediately contacted the VA DMV to find out what was going on. They stated they had never received my drivers' license package telling them I had moved, and that they had received a cancellation notice from my insurance company, so they sent me a letter (to my VA address) telling me that if I didn't prove I had insurance, they would suspend my license. I never recieved that letter (my mail was forwarded, but I never got this letter), so I never responded - so they suspended my license. Apparently, about a year after this was done, the states decided to integrate their database systems, so they could catch people using suspended licenses from other states. That's why I couldn't renew my Michigan license. So for 5 years, I was essentially driving illegally. That thought was a little nerve-rattling. It took about a month of phone calls and faxes, but fortunately, I had saved all my paperwork, and was able to prove I had insurance coverage at the time I had moved from one state to another, and was able to send the VA DMV that proof, which resulted in them removing the suspension from my license.

What a mess!

Posted: 10 Sep 2007 06:01 Post Subject:

So sorry, this is all you needed ! yikes !

Couple of ideas for you, first if you had a loan on this vehicle I'd be very surprised if the leinholder didn't require you to carry both collision and comp, (even if 'sleeping'). You might have been paying for this insurance right along with your payment, check to be sure.

Since you admittedly are upside down badly are you sure that you didn't purchase 'gap' insurance when you took out the loan? Clearly the leinholder knew when they took on your loan that you were upside down. I'm seeing more and more leinholders automatically include gap insurance.

If indeed comp were the only coverage on the vehicle, that coverage WOULD apply to this loss, but you would have to file a theft charges with the authorities (more than likely your insurance company would require this), against your brother, (which it really was), in order for your comp coverage to pay, (theft of vehicle and damages that result during the commission of the theft are covered under comprehensive coverage). If you decide to go that route, I wouldn't worry at all about filing the claim this late, you can't file a claim until you know one has occured. It isn't your fault nor was it within your control that your family kept this from you.

You don't say how old brother is, but I agree with another post, however you chose to handle this most definately brother should be paying the majority of this loss....

Again, so sorry you had to come home to this....Anything else I can be of assistance with let me know. And best of all things to you, and thank you for your service.

Posted: 11 Sep 2007 12:50 Post Subject:

Since you admittedly are upside down badly are you sure that you didn't purchase 'gap' insurance when you took out the loan? Clearly the lienholder knew when they took on your loan that you were upside down. I'm seeing more and more leinholders automatically include gap insurance.

I don't doubt that they probably push it pretty hard, almost indicating that it needs to be taken, and perhaps go a little further and "indicate" that it is... but I actually think it's illegal for them to require it. It would also be difficult not to approve someone if they did not buy it would be easy to see that they are declining people for this reason.

Posted: 14 Sep 2007 12:50 Post Subject:

They do however have the right to accept or deny the loan with conditions. What I meant by 'automatically' (and I didn't explain that well I admit), was that I am seeing many leinholders requiring Gap insurance from the applicant on some loans that are clearly upside down, or not accepting/taking on the loan.

Posted: 22 Sep 2007 01:51 Post Subject: Q

Hello all,

Just a quick thing regarding gap coverage. Normally, it's only available for vehicles that are purchased new or are only a year or two old. There are a few carriers out there that will provide gap coverage on slightly older vehicles, but they are tough to find.

A common problem we're seeing on gap coverage is absolutely the "upside-down" borrower. You owe WAY more than the car was worth at the time of the total loss. The average person has NO CLUE on how auto insurance settlements work on vehicles, and believe that they are entitled to the retail value of their car in the event of a total loss.

That isn't how it works, and the auto insurance gurus participating in the forum are aware of that.

These problems stem from little or no down payment on the new car, adding the balance of the previous car's lien to the new car lien, and cars that lose a huge chunk of their value after you drive them off of the lot. Pontiac is infamous for dropping value big-time after purchase. How else could you explain a car that retails new for $34,000 and is worth (with average mileage) $17,000 8 months later?

Woe is the person who totals out THAT puppy! Learn from this, and purchase cars that have decent resale values!

Good luck, and sorry about the loss

InsTeacher 8)

Posted: 22 Sep 2007 09:45 Post Subject:

and believe that they are entitled to the retail value of their car in the event of a total loss


Worse yet, and I see it weekly, people actually think/believe that when a vehicle is total the insurance company will automatically pay the balance of the loan. Believeing 'that' balance is (at least) the value. Sadly, I'd say easily a third of the totals I handle, the owner is left with a balance once the vehicle is totaled, and payment made. Then what happens? "Transfer of collateral" fancy way of saying leinholder rolls this (left over) balance into the replacment vehicle they purchase, immediately causing them to be 'upside down' again! I will say though, at least 25% of the vehicles I'm totaling have gap insurance now, which always makes me happy when I ask, and am told they have this. If I were the 'boss of the world" :lol: all leinholders would have to offer this on all car loans.

Won't even get started on the 'we tote the note' car lots. Every single vehicle sold is horrifically upside down for the entire term of the loan on these it seems.... Another point/lesson regarding taking care of your credit. :)

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