Have you ever thought about what will happen if your financed car meets with an accident? If you have a car loan or finance agreement, then it means that you do not own the vehicle completely. If this vehicle meets with an accident, you will have to pay the remaining loan amount. You may contact a lawyer and get help with your auto accident claim, Atlanta. This blog will discuss what happens when you crash your financed car in Atlanta.
The first step after an accident is to inform the police and then your insurance company. If you were at fault, the insurance company would pay the compensation for the vehicle. If the other driver is at fault, his insurance company will pay the expenses. The insurance company calculates the damage caused to the vehicle and pays accordingly.
It simply means losing a car to an accident. When the car is completely ruined and the expenses to repair the car exceed the insurance level of the car, the insurance company calls it a total loss. Things get worse when a car loan finances the car, and the remaining loan amount has to be paid even after the total loss of the vehicle.
FMV means fair market value in the current year. Let us understand this with an example- You took a car loan two years ago, and now the car accident took place, and the remaining loan amount to be paid is less, which means you owe less on the vehicle than the car fair market value. The insurance company will pay the remaining loan amount to the finance company, and you will receive the cheque for the difference.
Purchasing guaranteed auto protection(GAP) insurance helps you to protect yourself. It would be best if you bought it at the time of vehicle financing. The insurance will pay the gap amount between the FMV of the car and the amount received from the insurance company. See, this is how gap insurance can save you.
Car accidents can be painful, and with the financed car, the pain increases. Different types of insurance can cover the damage upto a level but not completely. Choose your insurance company wisely. You can seek help from a car accident attorney in case of need. Drive safe and stay safe.