I just got into an automobile accident w/my pickup 1/2 ton , and I’m wondering how does it work with a Total Loss and still being financed.
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UPDATED: Apr 1, 2012
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Insurance Question from Corona, CA
Asked on 04/01/2012
I just got into an automobile accident w/my pickup 1/2 ton , and I’m wondering how does it work with a Total Loss and still being financed. I recently was in an accident , My fault . I have Full coverage and I was making payments, I had only made 6 payments and they said the truck was a Total Loss. How does that work with me still owing on the vehicle, I am Disability and need a vehicle , will I be receiving the payoff for the loss of my truck and I can use this to purchase another vehicle or what happens with the payoff. Also what would happen if I did receive the payoff and then filied bk. Will I be sued????
Answer given on April 03, 2012
If your truck is totaled in an accident and there is a loan on the truck, the insurance settlement check will be made out to you and the bank, presuming they are listed on the policy. If you have gap coverage on the insurance policy then they will pay the full amount you owe on the truck. There may also be a clause in the loan that will accept a total settlment as payoff for the loan. You need to check with your insurance company and lender to see if either one applies.If not, you will get the actual cash value of the truck, which may not be enough to pay off the loan. If a vehicle is damaged early in the loan program it may have depreciated more than the loan amount has. If you do not get enough to pay off the truck you may be able to work something out with the lender to transfer that amount to a new vehicle. If you have paid on time and have a good record with them, they may be willing to work with you.
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