If my car was totaled in an accident and the at-fault driver’s insurer paid value for car but I owe more, can I sue for the difference if I settle the personal injury part of my claim?

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If my car was totaled in an accident and the at-fault driver’s insurer paid value for car but I owe more, can I sue for the difference if I settle the personal injury part of my claim?

Asked on January 4, 2013 under Accident Law, South Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You most likely cannot sue in this case:

1) When property is destroyed, the property owner is entitled to its then-current value; he or she is not entitled to more simply because he or she happened to pay more, or owe more, for it. Therefore, if  you were paid what the car was then worth, you received the compensation to which you were entitled. This is why people get "gap" insurance on their financed or leased cars, to cover the difference, in the event of an accident, between the car's value and the amount remaining which they owe on the vehicle.

2) It's most likely the case that, in addition to the above, the settlement agreement you signed or agreed to when you received the money from the insurer stated that the payment was in settlement or satisfaction of the claim; if so, then even if you could otherwise have sued for money, you could not, because you would have agreed to take that payment as payment in full.


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