Should my car insurance cover all expenses for theft of my vehicle, includingmy car loan?
Question Details:
My 2008 car was recently stolen and totaled out by my insurance company. AAA has agreed to pay the MSRP of the vehicle because I had full coverage, but I will still owe over $3,000.00 on the loan. Wells Fargo is harassing me about the car payments saying that I still owe on the vehicle. Why is my insurance not paying the whole amount? Why do I still have to pay the loan? Can I sue? How can I get a replacement vehicle? Do i have to pay interest on the car? How does this work out?
Insurance Law Law Answers
Car insurance has nothing to do with your car loan, other than the proceeds getting paid to the loan holder if the car is totalled. You are only insured for the value of the car, at most, not what the loan balance is or might be. You still have to pay the balance of the loan because you borrowed the money and made a legally binding promise to pay it back; that promise wasn't tied to the car still being in existence for any particular length of time, either.
You can't sue anyone here (other than the thief, in the unlikely event he or she is caught). You're pretty much on your own, as far as the replacement vehicle goes.
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