No fault, car totaled but we still owe money

[cfh2005]

What is the name of your state?What is the name of your state? NY

My wife was rear ended while at a stop light. It has been determined that the person who hit her was at fault. Our car has been totaled and his insurance company will only pay blue book which is $2400 less than we owe on the vehicle. We don’t have GAP insurance to cover the difference and my wife has seen the doctor and told she has whiplash. His insurance company told us that NY State law requires the insurance companies to pay only blue book value and they cannot pay more than that because we are not allowed to profit from the accident. I’m not sure how owing $2400 is profiting. We still owe the money and I was told by the dealership that it would be due immediately now that the car has been totaled. Is there anything that can be done to collect this money. We contacted a local attorney yesterday and he said no. I’m writing this in hopes that someone will give us some options. The insurance company is trying to push this settlement down our throats.
Thank you.

 

[shell007]

What is the name of your state?What is the name of your state? NY

My wife was rear ended while at a stop light. It has been determined that the person who hit her was at fault. Our car has been totaled and his insurance company will only pay blue book which is $2400 less than we owe on the vehicle. We don’t have GAP insurance to cover the difference and my wife has seen the doctor and told she has whiplash. His insurance company told us that NY State law requires the insurance companies to pay only blue book value and they cannot pay more than that because we are not allowed to profit from the accident. I’m not sure how owing $2400 is profiting. We still owe the money and I was told by the dealership that it would be due immediately now that the car has been totaled. Is there anything that can be done to collect this money. We contacted a local attorney yesterday and he said no. I’m writing this in hopes that someone will give us some options. The insurance company is trying to push this settlement down our throats.
Thank you.

Blue book: trade in, private party, or retail ????

The insurance co. usually offers/settles with "FMV" (fair market value) for a totaled vehicle. FMV is what other like vehicles in relatively the same condition are selling for in your area.

Never-the-less...diminshed value is not regularly recognized in many states from what I have experienced personally and from what I have read here on this forum.

Google: Reimbursement Diminished value New York.

I think it would be safe to assume that the attorney that you spoke to in your area gave you the correct answer.

 

[jpritchett81]

The insurance company will on pay fair market value for your car. If you do not have GAP insurance you will owe $2400. The only thing that you can do is check out vehicles that are in your area with like mileage and condition as your car was before the accident and submit to insurance company for review. They may give you a little more.

 

[JETX]

Is there anything that can be done to collect this money.

No. The insurance company wasn't there when you made your 'deal' to purchase so has no liability if you overpaid.
They also don't pay your bills for you, so have no liability for the interest rate you were offered.
They also don't drive or maintain your car, so have no liability for any pre-existing damage that might lower its FMV (Fair Market Value).
Bottom line, you are 'upside-down' in your note... and that is not the insurance company's fault.... or liability.

Ignore 'shellandy' post, as diminished value has NOTHING to do with a total-loss claim.

 

[shell007]

No. The insurance company wasn't there when you made your 'deal' to purchase so has no liability if you overpaid.
They also don't pay your bills for you, so have no liability for the interest rate you were offered.
They also don't drive or maintain your car, so have no liability for any pre-existing damage that might lower its FMV (Fair Market Value).
Bottom line, you are 'upside-down' in your note... and that is not the insurance company's fault.... or liability.

Ignore 'shellandy' post, as diminished value has NOTHING to do with a total-loss claim.

Sorry...I was lumping the two situations together. My mistake!

 

[cfh2005]

Aditional info

Does it make a difference that he was arrested for driving with a revoked license? BTW Thank you all for your input.

 

[jpritchett81]

Does it make a difference that he was arrested for driving with a revoked license? BTW Thank you all for your input.

No it doesn't

 

[You Are Guilty]

This situation is the whole reason gap insurance even exists. Given how cheap it is, I'm always surprised when I hear people with so much negative equity in their cars declining coverage.

Oh well, see if you can work out a payment plan as opposed to a lump sum.

 

[ablessin]

and you probably don't owe the dealer squat.
It's the bank. The bank paid the dealer for the car, you're paying the bank back. Why does the dealer tell you you have to pay a lump sum??

I think GAP insurance is now a requirement in NYS, but that is fairly new. I mean, within the past couple of years. How long ago did you purchase the car?

I could be wrong, but my husband bought a used car 2 years ago, and the dealer told him the GAP coverage was necessary. Unless he meant it was necessary for the dealer to advise getting it, who knows. but we got it and I am SO glad that we did.

You're getting what your car is worth, it is no one else's problem how much you actually OWE.... those balances always differ, due to bank interest, etc.

You will have to pay, probably before you get a loan for a new car, unless you can roll over this balance into your new auto loan. You will have to ask.

 

[shell007]

I've been told by a few insurance companies in the past that GAP insurance is only an option on NEW vehicles not used because of the HUGE value of depreciation the minute you drive that NEW car off of the lot.

This is just what I've been told.

 

[ablessin]

well, we have it on our used cars, and so do a few other people that I know.

Google gap insurance though, for more information.

You'll be surprised. Most dealers recommend getting it, it's a very good thing to get, and cheap - about $10 a month

 

[shell007]

well, we have it on our used cars, and so do a few other people that I know.

Google gap insurance though, for more information.

You'll be surprised. Most dealers recommend getting it, it's a very good thing to get, and cheap - about $10 a month

Hmmm...worth checking into again!

 

[JETX]

and you probably don't owe the dealer squat.
It's the bank. The bank paid the dealer for the car, you're paying the bank back. Why does the dealer tell you you have to pay a lump sum??

And of course, that is not necessarily true. There is a huge secondary market in vehicles where the dealer does the financing. If that is the case here, as it appears, your post is incorrect.

I think GAP insurance is now a requirement in NYS, but that is fairly new. I mean, within the past couple of years. How long ago did you purchase the car?

What you 'think' is not relevant. There is no requirement for 'gap insurance' in New York.

I could be wrong

Could be??

 

[ablessin]

Hmmm...worth checking into again!

Yeah, I would. Good luck! It's definately worth the peace of mind!!
It is so cheap - it's just like renter's insurance (I pay like $9/month) -
because you know, you just never know!!!

There are loads of maniac drivers out there and other people make me SO nervous.