If I was involved in an accident, and my car was deemed a total loss, what are my rights to reimbursement for my auto insurer?

UPDATED: Sep 29, 2022

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If I was involved in an accident, and my car was deemed a total loss, what are my rights to reimbursement for my auto insurer?

I have GAP insurance and the settlement was supposed to cover my loan balance. However, my insurance company issued a check to me, then stopped the payment on my loan balance because they paid too much. They are now saying I am responsible for the difference between what they are willing to pay and the loan balance. Am I responsible, even though the mistake was made by them?

Asked on October 29, 2015 under Accident Law, Georgia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

If you had gap insurance, you should have received an amount equal to the greater of the car's then fair-market (blue book) value (if it was greater than the remaining loan balance) or your remaning loan balance (if the loan balance were greater than the FMV); if you did not receive that much, then based on what you write, it would appear that the insurer has violated its contractual obligations (an insurance policy is a contract) and you could sue them for breach of contract, to recover the unpaid amount. Before doing that, re-read your policy carefully and compare vs. what you received--make sure you were in fact shorted before filing a lawsuit.

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