Total Loss - Limbo

whyme2013

New Member
5
Hello,

I apologize in advance if I did not submit this thread correctly or if this is a repost. But I have been looking all day for some sort of answer for the "total loss" situation I am in, and I have not found any.

Scenario-

My (parked) car was hit by a Pizza driver in an apartment parking lot, along with 3 other cars. I received a call to come move my car because the pizza driver had managed to push my car into the street and the Police Officers considered it a hit and run, being that he did not report it and went back to work. (Crazy, I know, but I am glad that they found him later and documented that he was liable).

The issue is, after several months (approximately a month ago) all 4 cars (including myself) received a pro quota settlement, if/when we signed a release of liability form. The limbo is, my car received the most damage (my damages valued at $11,000 while the other cars valued at no less than $2,000.) The Pizza driver had a minimum policy of $10,000, in the state of Arizona. Not to mention that my car was considered a total loss, being it was valued at $9,500.

I've already signed the release form and cashed the check that I settled for, for $7,500, a month ago. But I just received a call, today, from the insurance adjuster, informing me that my car is a total loss and asked if I wanted to keep it or salvage it. First off, I had no idea that was option. I just thought I was suppose to sign the release form and be done.

I am up in the air with the question, rather to keep it or salvage it. Bc I owe $6,5000 on it, but I did purchase Gap Insurance when I financed/bought my car. So with that said, what are some logical suggestions?

Please forgive me if I was unclear, Im 23, first time in an accident and first time EVER dealing with insurance. Thanks in advance.
 
If the car is valued at 9,500 why did you accept only 7,500. I'm not familiar with your state law but in SC you should have been able to claim underinsured on your policy to make the difference up if he did not carry enough coverage.
 
True. Small Claims. They fired the ole Pizza Man 3 accident in less than 5 years. I tell ya! Thanks for the reply
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If the car is valued at 9,500 why did you accept only 7,500. I'm not familiar with your state law but in SC you should have been able to claim underinsured on your policy to make the difference up if he did not carry enough coverage.

Because I had to split it with 3 other cars. (their cars valued all together around $4,000 something) so we all pretty much had to split pie , but questions is, why I am JUST NOW getting a call about rather or not I want to keep my car?
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I bit of information that is vital that I forgot to mention, I did not have insurance at the time. So I never file a claim under my insurance. Just played the waiting game with the Pizza Drivers insurance company (theee LIZARD).

The insurance adjuster also stated something about, "I want to get you paid", once he informed me that I will have to get the titled salvaged. So I have no earthly idea, what I will be getting "paid" for if I already settled for the pro quota claim.

BREAKDOWN of the SETTLEMENT

Me- $7,500
Car 1- $550
Car 2 - $2,000
Car 3 $1,000

Totally somewhere around $10,000.
 
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Many times you can opt to buy back your car at a cheap salvage title price instead of it going to the junk yard. They are probably about to sell it to a junk yard and want to see if you want to buy it. This is very common. I have bought a car back after being totaled. I got it back for $500. Beat the dents out and drive it for another year while I saved for a better car and pocketed the difference of what the totaled value was. In your case you would owe it to the bank. I have clients do this all the time.
 
AdvisorIn-

Thanks for the reply. That took a big burden off of me. I have question for you. Where and when does GAP insurance come into play?
 
Gap insurance comes into play when you are upside down in a finance contract. If you owed 9k but your car was worth 7k. The gap contract would make the difference up to the bank or person holding the note. Before you buy Gap insurance from a car dealer again check your auto insurance carrier to see if you can add loan/lease gap coverage to your policy for cheap.
 
AdvisorIn-

Thanks for the reply. That took a big burden off of me. I have question for you. Where and when does GAP insurance come into play?

In this case if your car was totaled, it would come into play since the claims payout was less than your loan. I wonder if you can still get the gap coverage if you were to buy back the car vs. a normal salvage. I don't know if there is a clause in gap insurance for instances where it is deemed a total loss, but you are still driving it after buying it back and fixing it up; they don't payout. It would be great if you were to call your gap insurance company and see if the gap still apply if you buy the car back, then post here. Curious. :idea:
 
In this case if your car was totaled, it would come into play since the claims payout was less than your loan. I wonder if you can still get the gap coverage if you were to buy back the car vs. a normal salvage. I don't know if there is a clause in gap insurance for instances where it is deemed a total loss, but you are still driving it after buying it back and fixing it up; they don't payout. It would be great if you were to call your gap insurance company and see if the gap still apply if you buy the car back, then post here. Curious. :idea:

Blue_Wynd- I will definitely keep you guys in the loop and let you know what the outcome is. I found out sometime early this coming week. Once again. Thanks for the advice.
 
When the car is 'totalled', the finance company wants to get paid FIRST. If you opt to keep the car, that is fine, but the finance company will get paid off.

Now you don't have a loan. Gap insurance is no longer an issue since there is no loan on the vehicle.

If you can find someone to finance a salvage car (very difficult), they will not offer gap insurance. Your insurance company will not offer it either, since its not a new car.

Also, I could be wrong, but I doubt the gap policy will cover the $2000 of shortage on the payout. If the insurance company valued it $9500, you get a check for $7500 due to policy limits, gap will use the $9500 number and the loan value minus any rolled in costs (i.e., upside down on the trade in) to calculate the amount paid for in the gap coverage.

This is where paying for your own insurance would save your butt. You will now probably have to pay the balance between what you got for the car and what the cars value was prior to the accident.

Dan
 
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