I was rear ended and my car is not paid forwho.who is responsible for the balance if my loan if the car is totalled?

I was rear ended..my car is not paid for and if my car is
totalled how will the balance of my loan be determined

Asked on September 4, 2016 under Accident Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

*You* are responsible for the balance of your loan, unless you purchased the relevant type of insurance which pays off the balance of your loan in circumstances like this. Otherwise, the at-fault driver (which is almost certainly the rear driver; the law presumes that the rear driver in cases like this was at fault, since he or she is responsible for maintaining a safe following distance and speed, and stopping in time) and/or his or her insurer is only responsible for the then-current fair market (or "blue book") value of your car, not for the remaining loan balance. That is because when someone is af fault in destroying any property, the law holds him or her responsible for its value, not its cost, since cost can vary wildly and have no relationship to value. Sometimes this helps you--if a family member gave you the car for free, you'd come out ahead, because you'd get its value, even if you paid nothing for it. Othertimes, like this situation, it most likely hurts you, since due to depreciation (and as a function of how good a deal you struck), the fair market value is likely less than the remaining loan balance.

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