If I was rear-ended by someone and their insurer totals my car, if it gives me less than I owe, can I sue the driver for the rest?

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If I was rear-ended by someone and their insurer totals my car, if it gives me less than I owe, can I sue the driver for the rest?

Say I owe $7000 and the insurance gives me $2000. Can I sue the driver for the extra $5000?

Asked on April 2, 2012 under Accident Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you accept the $2,000 and the settlement agreement with the insurer provides  that you are waiving or giving up your right to sue for additional money (e.g. to sue their insured), then no, you could not sue--such a waiver provision, in a settlement, is enforceable. Therefore, before deciding whether to accept the $2,000, you have to read the settlement agreement carefully and see what rights you are giving up. It is almost certainly the case that the agreement will have you waive any additional claims against the insurer or the insurered from this accident, which would preclude you from suing for more.

In addition, generally speaking, someone at fault in an accident (or their insurer) is not required to pay off the remaining balance of your loan or financing on the car--they are required to pay (if fault is proven) the then-current value of the vehicle, which is generally less. So if the car was only worth $2,000, for example, then it doen't matter if you owed $7,000--$2,000 is all you could get.


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