Legal Question in Personal Injury in California

My husband, our 2 sons and myself were involved in an accident on January 8, 2011 (rear-ended by someone on the cell phone). My husband lost his job and both he and I are continuing to have bodily issues. To make a long story short, our insurance company settled payment for our vehicle, however there was a remaining balance of approximately $3,000. We recently received a Property Damage settlement offer from the other party�s insurance. Unfortunately, it still doesn�t NOT cover what we lost. Our vehicle was totaled in the accident. So we lost our down payment and still have an outstanding balance on a vehicle that we do not have. Are we entitled to receive our down payment PLUS the remaining balance on the vehicle? We don�t understand how we could be OUT MONEY because on an accident that wasn�t our fault!!

Asked on 11/14/11, 12:57 pm

5 Answers from Attorneys

Michael Stone-Molloy The Lion's Law Office

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There's a kind of insurance called "Gap Insurance" that covers this sort of situation. The problem is that very often, especially when buying a new car, the value depreciates faster than the payments on the loan. The defendant in an accident needs only pay the fair market value at the moment of the crash--NOT whatever is owed. So if a new car rolls off the lot and gets totalled in an accident, there will be a gap between the total loss payment, and the outstanding balance on the car loan. If you buy "gap insurance" then they will make up the difference. Otherwise, you are left holding the bag. That's just the way it is.

However, you can more than make up for the loss by properly presenting your personal injury case. This is not something for "do it yourself" handling. You and your family need to be seen by the proper medical experts, and for that, you need an attorney vouching for the merits of your case. Also, the insurance companies never treat unrepresented people fairly. You need to hold the threat of a lawsuit over their heads right from the start.

We can help you in this case, so to discuss the details, call toll-free (877) LION-FOR-LAW (546-6367) or email me at [email protected]

Answered on 11/14/11, 1:28 pm

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ARMAN MOHEBAN LAW OFFICES OF ARMAN MOHEBAN

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Feel free to call us at 213.388.7070 for a free consultation about your case.

Answered on 11/14/11, 2:05 pm

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George Shers Law Offices of Georges H. Shers

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Unfortunately, Mr. Stone-Molloy is correct as to what the law provides for. You can only collect either the cost of repairing the vehicle or its fair market value. You should look to see if the financing contract for your car allows you to pay off the principle early to avoid the additional interest charges [probably does not]. During the time it would reasonably take to obtain a replacement vehicle you are entitled to loss of use which is the cost of getting a similar vehicle via rental. Most insurance companies will directly pay the car rental company. they should have told you this. I was successful in getting one carrier to pay the daily rate for renting as opposed to the actual weekly amount and also to pay for a reduction in value of the car [which you likely will not get on a totaled car and is difficult to get anyway]. You have to push hard with a reasonable sounding letter to get that added value. You need to convince them that in your situation a wage loss or need for a substitute cal continued for a longer than normal time because of your inability to get another vehicle and the need of a vehicle to continue work. Part of your claim is for wage loss so you might be able to make up some of the lost car damages that way.

not proof read

Answered on 11/14/11, 2:06 pm

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P.J. Javaheri THRULAW, P.C.

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This is a very common problem when there is no auto gap coverage. Auto gap coverage comes into play when a car on which you still owe a significant balance is either totaled or stolen. While your car insurance policy will cover the current value of your auto, you will still be responsible for the difference between that value and the amount of your car loan.

Since cars begin losing value as soon as they are driven out of the dealership, that difference covered by auto gap insurance can be a hefty chunk of change. Take, for example, a driver who gets into an accident six months after he buys a $30,000 car. Once the auto is determined to be totaled, his car insurance company covers the $25,000 that the Kelley Blue Book says his car is now worth.

Taking into account his $1,000 deductible, the driver must come up with $6,000 of his own money if he wants to replace his vehicle. Some auto gap coverage programs will pay for the entire $6,000, while others will cover the $5,000 gap while leaving the driver to pay the deductible.

There may be other ways to maximize your recovery with assistance of an attorney. One of the biggest mistakes people make is thinking that they could handle their case. For maximum recovery we recommend that you contact us here at ThruLaw, P.C.

Feel free to call me directly if you have additional questions at 310-295-2056.

This response is for informational purposes only and should not be construed as legal advice. The material posted on this website is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel. For specific information or for a free initial consultation with an attorney, contact (855) THRU-LAW or visit www.ThruLaw.com.

Answered on 11/14/11, 2:31 pm

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