Insurance saying Cost of Repair Exceeds Car Worth

What is the name of your state? New Mexico

My Insurance is being difficult with respect to paying for repairs to my car. They say the repairs exceed the car's worth. So for example if I owe $7,000 to my lienholder and the insurance only gives me $4,000 what are my options as to what to do with the remainder due? I have full coverage and my lienholder is, of course, included in the policy. I thought that the philosophy of an insurance was to put you back to the original position that you were before the accident.

Help

Thanks,

[gobonas99]

The insurance company bases their decision on the value of the car at the time of the accident. For an insurance company to "total" a car, the cost to repair the damage must be more than 75% of the market value of the car (ie how much a dealership would be able to sell the car for). The VALUE of the car is in NO way related to the amount that is OWED on the car. And while you would hope that the amount you owe is less than the value, that is typically not the case. Depending on the extent of the damage, you may be able to pay the $4k from the insurance co to the repair shop, and then just pay the difference on your own. Otherwise, I'd start looking for a new car - and see if they can roll in the remaining $3k from the previous loan into the new loan.

Not what i wanted to hear, but thank you. (Sigh!)

When you financed the car did you also include "gap coverage"? If I am not mistaken this is used in cases like this where you are offered less than what you owe....it essentially covers the "gap".