If the loan on your car exceeds the value of the car, and the car is stolen & you have full coverage on the car does the insurance company pay the full amount of the loan off?
2007-08-14 09:15:51 · 7 answers · asked by kalik 2 in Cars & Transportation ➔ Insurance & Registration
I hope you were just wondering and your car was not stolen. You have already gotten your answer.
2007-08-14 09:26:38 · answer #1 · answered by saturn 7 · 0⤊ 0⤋
If your vehicle is stolen, and they establish it has been and there is little chance of recovery, and you have coverage for fire, theft or collision, the insurance company will give you what the vehicle was worth, market value, at the time it vanished. If you owe more than that, you will continue to make payments until they have been paid in full. If you wanted to have the loan covered in case of loss, you should have opted for GAP or Vendor's Single Interest on the vehicle which would make up the difference between value and pay off price.
2007-08-14 16:23:54 · answer #2 · answered by oklatom 7 · 0⤊ 0⤋
No. The insurance company pays you fair market value for the car. They don't care how much you owe on it, because it isn't their problem. This is why they have gap insurance, to pay the difference between the amount owed and the actual value. You do have gap insurance, don't you? If not, you pay the difference out of your pocket.
2007-08-14 16:32:15 · answer #3 · answered by Scott H 7 · 0⤊ 0⤋
absolutely not. You are only owed the actual cash value of your car (unless you paid for gap insurance)
"How is that fair" you ask? How is it not? Lets say your car is worth 5k.. and you loan is 8k. You owe 3k more then the worth of your car.
Once the company pays off that 5k... you get a new car that is 5k and add it to the loan.
You now owe 8k again on a car worth 5k.. you are in the exact same situation as before.
Insurance "makes you whole" - it doesnt put you in a better situation then before.
2007-08-14 16:22:56 · answer #4 · answered by la428282 6 · 2⤊ 0⤋
Unless you carry gap insurance, no. They will pay the Blue Book value. It only insures what the car is worth, not whay you paid for it. Gap insurance is available to bridge the difference in book value and what is owed. Some insurance companies are now covering the replacement for one year on new cars.
2007-08-14 16:22:13 · answer #5 · answered by sensible_man 7 · 1⤊ 0⤋
the only way they would pay the difference is if you have something called gap insurance on your car. otherwise, the insurance company is only responsible f/ the current value of the car, NOT the amount of the loan.
2007-08-14 16:19:30 · answer #6 · answered by My Pits A Lover Not A Fighter 5 · 2⤊ 0⤋
Nope. The most you'll recover is the book value; the lien holder will receive the check, since the car is actually their vehicle until the loan is paid in full. You are responsible for any shortfall. Sorry! Good luck!
2007-08-14 16:20:46 · answer #7 · answered by Kiffin # 1 6 · 2⤊ 0⤋