Totaled a Leased Car? Here’s What Full Coverage Insurance Means
When you lease a car, the financing company will more than likely require you to carry full coverage for your auto insurance policy. This is designed to protect you in the event of a collision. However, Alabama’s auto insurance laws are complex, and totaling a leased car may make your case that much more complicated.
Fortunately, you do not have to navigate the claims process on your own. Your community-driven Birmingham car accident lawyer from Drake Injury Lawyers can help you deal with the insurance company and potentially avoid having to continue making payments on your lease. Here is more about what full coverage means, how Alabama fault insurance laws work, and how to demand justice and the fair compensation you deserve.
When Is a Leased Car Totaled?
It may surprise you to learn that a vehicle is only considered totaled when the insurance company believes the repair costs are too high and determines that it is not worth the price to make the repairs. This is a little different from the assumption that a vehicle is totaled if the damages cost more than the vehicle’s fair market value.
Typically, the insurance company will consider a car totaled if the cost of repairs will be more than 65% of whatever the car is worth. For this reason, even if the damage to your leased vehicle is less than the value of the car, the insurance company may still consider it totaled.
What to Do After You Total Your Leased Car
Figuring out your initial steps after your leased car has been totaled can be intimidating. First, you need to make sure that your vehicle is considered totaled. Since you do not own the vehicle you are leasing, you may be expected to continue making payments on the vehicle, even though it has been totaled.
File a Claim With the Insurance Company
Alabama is a fault insurance state as described by the Alabama Department of Revenue. After being involved in a collision, whether you own or lease the car, you will file a claim against the liable party’s insurance policy. If you are not responsible for causing the accident, you will file a claim with the at-fault party’s insurer. The amount of compensation you can recover from the insurance company will be based on how much coverage the liable party carries.
If you are responsible for causing the accident you are involved in, you will not be able to file a claim against your insurance policy unless you have personal injury protection (PIP) or no-fault coverage. Your leasing company may have required you to carry additional types of insurance coverage in the event of a collision. This might include comprehensive, collision, and uninsured or underinsured motorist coverage.
The Importance of GAP Insurance
As you know, even if the vehicle is totaled, you are still going to be expected to continue making payments on your lease agreement. You are expected to return the car to the leasing company in good condition once the lease term expires. If your leased car is totaled, you may find yourself struggling to cope with the fallout of your injuries, and being unable to continue making payments to the leasing company.
For this reason, it is crucial that you carry GAP insurance coverage. GAP insurance can help protect you if your vehicle is totaled, no matter who is responsible for causing the accident. GAP coverage covers the cost of your lease payments from the date of the accident to the end of your lease term. This is an invaluable type of auto insurance coverage to have and may be required by your leasing company, depending on the specific details of your lease agreement.
Speak With a Premier Alabama Car Accident Attorney for Help Today
Being involved in a collision with a leased vehicle can be stressful. However, when your vehicle is totaled, you may find yourself responsible for ongoing lease payments with nothing to show for it. Do not let the at-fault party get away with their negligent actions. Demand they be held accountable to the fullest extent of the law so you can avoid financial ruin.
Consult a high-powered Birmingham personal injury attorney from Drake Injury Lawyers to consider your options for legal recourse further. Our team proudly offers free case reviews to car accident victims throughout the state of Alabama. When you are ready to take advantage of this opportunity to take back control of your life, but are unsure of where to begin, do not hesitate to call our office or fill out our quick contact form to get started on your case as soon as today.