A problem we sometimes see when cars are involved in crashes is that when a vehicle is declared a total loss, the owner who was hurt ends up owing money on the car.
Why? Because an insurance company in Florida only has to pay the “FAIR MARKET VALUE” of a vehicle- what it costs to replace the damaged car with the same vehicle.
Insurance companies don’t care that you have a loan that greatly exceeds the value of the car.
“Belcher said that having a full warranty didn’t matter and she just learned that her insurance is only paying half of what she owes on the car. For now, she still on the hook for monthly car payments for at least the next three years on a car that she can no longer use.”
So it’s important when you’re buying a car and financing it (especially with some of these new 72 or 84 month loans) to think about buying products that put you at zero- things like “gap” insurance, which you can buy from a dealer, but many auto insurers offer.
Call (813) 221-9500 or click here to reach out to us at FL Legal Group with any insurance questions you may have.
Michelle Belcher’s 2012 Kia Soul.Screenshot: WTVRAuthor: FLLegalGroup