Auto Ins. Responsibility

[LyndaTR]

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

My fiance's vehicle was stolen right out of our driveway while we were out of town. We have kept the vehicle in great condition and well maintained however, we owe 11k on the note and the vehicle has 157k mileage.

We are being told that the ins. will only pay what the car is worth not the balance owed?

Why would a bank ever allow us to insure a car for basically less then they are owed? It just doesn't make sense to me. I mean the book basically says the car is work 3k. So what, he files a BK in order to deal with the balance?

 

[JETX]

"We are being told that the ins. will only pay what the car is worth not the balance owed?"
*** That is correct. Unless you have 'gap insurance' to cover the difference, the insurance company is only required to pay you fair market value for your vehicle.

"Why would a bank ever allow us to insure a car for basically less then they are owed? It just doesn't make sense to me. I mean the book basically says the car is work 3k."
*** Clearly, something is wrong or missing in your post. Though the bank has no direct involvement in your decision to purchase insurance, it seems highly unlikely that they would risk an $11,000 (plus) loan on a car like you describe (157K miles!!) and only worth $3000. Of course, the vehicle could have been trashed after they made the loan......

"So what, he files a BK in order to deal with the balance?"
*** Bankruptcy may be an option, but the decision to file is not to be taken lightly and should be done only after a THOROUGH review of ALL the finances.