I had full coverage and owed my bank do my insurance supposed to pay my car off?

UPDATED: Oct 1, 2022

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I had full coverage and owed my bank do my insurance supposed to pay my car off?

I was going West on Jolly and the other
driver ran the stop sign while trying to
make a left on Jolly. I went to hospital
and they said that I received a chest
contusion, concussion, and back and
neck strain. New Link Destination
day I go take another CT
scan and chest and stomach x-ray
because I am bleeding black blood.

Asked on July 11, 2018 under Accident Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Only if you had what's called "GAP" insurance would the vehicle be paid off. GAP is a separate coverage which you have to buy--it's not part of collision, liability, or comprehensive, so you could have "full" coverage without having it.
If you had GAP coverage, whose entire purpose is to pay the "gap" beween what the vehicle was worth when destroyed and how much you owe, it should pay the bank for you. But if you did not have GAP coverage, you would only receive the vehicle's then-current (as of when it was totalled) fair market (or "blue book") value, which is generally less than the amount owed on the loan due to depreciation. You would have to pay off the difference between what you received from insurance and the remaining loan balance.

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