What If The Settlement Value Of The Car Is Greater Than The Balance Due?

What If The Settlement Value Of The Car Is Greater Than The Balance Due?
May 31, 2020

Photo Cred: AAA Insurance

As if you’re not already overwhelmed enough with everything that has happened to you as a result of your car accident, right?

We understand that not only are you in physical pain…

Not to mention losing wages from missing work…

But now you have to add on the stress of not being able to run your errands, not being able to drive to or from work….


You’re paying rental expenses out of pocket all because your car is completely damaged, and or non repairable.

First, you are not alone.

Many of our clients are concerned about their vehicle – especially if they get the dreaded news through their attorney that the total loss adjuster has declared your vehicle to be a total loss.

Understandably, there comes a lot of confusion and frustration with how it affects you, the client, when your car is a total loss.

So we want to help you understand what it means when your car is valued at a total loss, and the impact it has on a vehicle that is financed with an outstanding balance.

What Does It Mean When Your Car Is A Total Loss?

Your car will be considered a total loss if the insurance company verifies your vehicle is valued at less than what it would cost to repair the damages to your vehicle.

Let’s say you own a 2006 Honda Civic that is valued at $3,000, but when the damages were appraised, it shows it would actually cost $7,000 to repair the damages.

This would be considered a total loss.

Luckily, there are a few credible websites you can access to assure the insurance companies adhere to a fair actual cash value (ACV).

Websites where you can check the ACV of your vehicle are:

When working with an attorney, your attorney will conduct this research in order to maximize your settlement check for your car from the insurance company.

What If I Owe More than What My Vehicle is Worth?

This is probably the most daunting news for our clients when it comes to their vehicle being labeled as a total loss…

A few of our clients have experienced the stress that comes along with this informaiton.

When the settlement value of your car is greater than the balance due, you are still liable for the remaining balance of your loan.

For example, if you owe $10,000 on your car that needs to be paid to the bank, but your vehicle is worth $5,000 at the time of the accident, the insurance will pay $5,000 the value of your vehicle, you will still be responsible for paying $5,000 to the bank…

…even if you are no longer in position of the vehicle.

Unfortunately, when this is the case, there is nothing your attorney can do about it.

The only way you can be relieved from the burden of having to legally pay the bank $5,000, is if you purchased gap insurance.

How Does Gap Insurance Help Me?

Gap insurance covers the amount between what you owe to the bank, and what the car’s cash value currently is.

So let’s say we apply the example given above: you owe $10,000 on your car loan, but your vehicle was declared a total loss, and valued at $5,000.

Without Gap insurance, you would still be responsible to pay the bank $5,000.

However, if you have Gap insurance, Gap will pay the bank what you owe. Which in this case, would be $5,000.

The total loss process is fatiguing to approach along.

You should always call upon a qualified, car accident attorney to help you navigate this process and to assure you receive the best settlement possible.

For help from a seasoned car accident lawyer in Encino, call 1-888-LAW-0707, or fill out your information here to receive a call from a seasoned attorney at NO COST.

P.S. Be sure to check out our 5 star rating on Google and to see what other clients have shared about working with us!