It can be incredibly stressful when you experience a horrific accident that destroys your financed vehicle. Financing vehicles is incredibly convenient when you are unable to afford the upfront cost of your car. However, after your car is unexpectedly destroyed, you may be required to continue paying for the vehicle and need a new car. However, there are ways you may be able to get around this issue.
Fortunately, insurance companies take into consideration what might happen if a financed car is badly damaged or irreparable. A car accident attorney would recommend you initiate an insurance write-off.
Why You Can Do An Insurance Write Off
When you experience a life-threatening car accident, the car may be so badly damaged that it is no longer driveable. You should consider an insurance write-off when the car is so irreparable that it must be entirely replaced. This is because the car cannot be used anymore, and the repairs are so extensive they cost more than the car itself. When the costs of the repairs are extremely high, it is better to do an insurance write-off.
Write Off Types
Your write-off can happen for four main reasons. The first is if your car is badly damaged and only some parts of it are salvageable. If your car was not severely mangled beyond repair and there was only minor damage, some parts can still be salvaged as spares. The car might have structural damage and be unsafe to drive, requiring an insurance write-off even though it is not completely totaled. Lastly, the car may be fine structure-wise but has cosmetic or electrical damage. In this case, it cannot be driven. For any of these reasons, it would be a good idea to seek an insurance write-off.
What Happens If My Car Is Written Off
When you write off your car, you basically agree to give up your vehicle to your insurance company whether or not you are at fault. This is based on the terms of your insurance policy. What you should know about your writing off your car includes the following:
Decision To Accept
You do not need to accept the decision of your insurance write-off. If you decide to, you can keep your car even if it is damaged. The costs of the repair of your vehicle will be up to you.
Offered A Settlement
After you agree to write off your car, you will be offered a settlement by your insurance company. Based on current market estimates, the amount should be enough to replace your vehicle.
Car Ownership Transferred to Insurance Company
After you agree to the settlement terms, your insurance company takes on the car as the new owner. They are then responsible for disposing of or repairing the damaged car.
Continue With Monthly Payments
You need to continue paying for the vehicle until it is officially written off. If you skip a payment, the bank or funding organization will eventually send your bill to collections. Once it is written off, you can stop making payments if the settlement amount is more than enough to cover the debt of the vehicle.
Notify The Finance Company
Stay in touch with your financial company and tell them you have written off the vehicle. With the settlement, you can use the money to buy another car and continue paying off the finance if the settlement is less than the amount you owe.
Buy Car Back And Cover Repair Costs
Buy a car for a similar price to replace your old vehicle. You can also buy a car for a smaller value if you want to pay off the rest of your debt.
What If The Settlement Does Not Cover The Cost Of Finance?
When you do not receive a large settlement award, you will have to continue payments like usual. You will still have outstanding payments in this case.
Can You Fight The Settlement Amount
If the settlement was small compared to the level of damages your vehicle sustained, you might be dealing with a case of bad faith insurance. In these situations, you can request an appraiser to revalue your car and provide you with a correct estimate. The best approach would be to speak to a car accident attorney who can help fight for your right to a fair settlement.
Attorneys are able to accurately estimate how much in damages you are owed. If your car is badly damaged, they will calculate how much property damage your car suffered. They can then seek an adjustment on your insurance write-off settlement using their estimate. If your insurer refuses, attorneys can use additional evidence to demonstrate you should receive a higher settlement up to your maximum coverage.
If you were not at fault, you could work with your car accident lawyer to seek a settlement from the at-fault party’s insurance company. This is also useful if your car was so badly damaged that it goes beyond your insurance coverage. Your car accident attorney can decipher your insurance provider’s policy and demystify any jargon to help you understand what is covered under your policy.
You Can Take These Next Steps For Your Written Off Car
If you were able to salvage any parts, try to sell them so you can cover some of the costs of your debt. Try to purchase a car that is a slightly older model than your current one so your settlement can pay off the rest of your last financed vehicle. You can also use all of the settlement to cover the debt and initiate a new one by purchasing a brand-new car under new terms. Speak to a car accident attorney to find out what is the best approach and how much you deserve in settlement money. Your lawyer can explain the process and what to expect.