Can I go after insurance company if I’m dissatisified with what they want to settle for if it leaves me owing more money on my loan and I’m still out 2 vehicles?

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Can I go after insurance company if I’m dissatisified with what they want to settle for if it leaves me owing more money on my loan and I’m still out 2 vehicles?

There was a 4 vehicle wreck. Vehicle 1 was found at fault by the insurance company. My vehicles were 2 and 3 which have front back damage; both have been deemed a total loss. After money that insurance will pay, it leaves me still owing money on my loan. I owed $18,000 on the loan; insurance pay $14,500 for Vehicle 2 but I still owe $3,500; insurance is paying $3,200 for Vehicle 3.

Asked on May 25, 2017 under Accident Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

When a vehicle (or any item of property) is destroyed, the at fault person or your insurer is only liable for the then-current fair market (e.g. "blue book") value of it. It does not matter what you paid for it, since that varies so widely and has little relation to what the thing is really worth. Sometimes this hurts you, as you in your case: due to depreciation, the fair market value is less than the remaining loan balance. But other times it helps: if a family member sold you a vehicle at a well-below-market price--or even gave/gifted it to you--you sell get the fair market value, even if you paid little or nothing for it. The value is an objectively determinable and consistent measure of what a thing is worth, and is what the law uses to determine compensation, unlike price, which varies case by case with luck, negotiating skills, etc.
Also the fact that you may be financially strapped for a down payment is irrelevant: if the law took that into account, it would give poor people more money for a destroyed car, since they "need" the money, than well-off people, and that would both be inequitable and would have nothing to do with what the destroyed car was or is worth. So the law does not take your need into account.
So if you were paid the fair market value, that is all you are entitled to. If you can prove that the fair market value for your particular cars was higher, such as due to new parts, a high standard of provable maintenance, low mileage, etc., you may be able to get a bit more than the "average" fair market value (even for fair market value, there is a range based on condition, options, features, mileage, etc.), but that's about all you can do.
To consider: if you can't afford the down payment, lease instead, which will also result in a lower monthly payment. That's what I do, to avoid sinking money into a car which may or may not hold its value based on factors (like if someone runs into it when I am not at fault) beyond my control.


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