Car Accidents - Property Damage
Attorney
(866) 735-1102 Ext 360
You've been in a car accident. It's the other person's fault. Your six month old car is totaled (In Alabama, that means the damage is greater than 75% of the value of the car). You owe the finance company more than the car is worth. You tell the other person's insurance company to pay what you owe on the car, and the insurance company tells you, "No! We'll pay you what your car is worth." What do you do?
This is exactly the situation one of our clients is in right now. The insurance company has offered her $16,286.33, and she owes $22,700.00. When she gets the money from the insurance company, she'll still owe the finance company$6,413.67, and she'll have no car. Is that fair? No, but that's Alabama law.
For years, the law in Alabama has stated that your compensation for property damage is the difference in value of the car before the accident less the value of the car after the accident. Unfortunately, this law has not progressed with the times. Cars are expensive today. Most people finance their car for sixty (60) months. These same people are upside down on the car (owe more than it's worth) for the first two or three years of payments. When someone is negligent and totals the car, they should be liable for the other person's total damages. Those damages include what they owe the finance company.
How can you combat this problem? Unfortunately, the only real way to combat the problem is through the purchase of gap insurance. Who does that benefit? The insurance companies of course. Who else?