In San Diego, various car service providers offer vehicles on lease. This flexible option has lower monthly payments than buying a car. Thus, many drivers have already opted for this service, and it provides the same excitement as owning a vehicle. However, the situation is not quite similar when you get involved in a road accident in the leased car, which can result in totaling the vehicle. So, let’s learn how to tackle such a situation and whether it has any financial implications.
What Is a Total Loss?
If the vehicle’s repair cost is more than its market value, it is known as totaled. Alternatively, the car is also totaled if it cannot be driven safely if the damages are severe. So, if you are filing an insurance claim, compensation is provided to the leasing company for the vehicle’s actual cash value. The problem arises when the payout does not cover the remaining balance owed on the lease.
What Are the Financial Implications?
Usually, a discrepancy arises between the money paid by the insurance company to the leasing company and the amount you owe on the lease. To cover this gap is your responsibility; if you do not have adequate coverage, the remaining balance must be paid out of pocket. Moreover, to tackle the situation’s legal aspects, you can consult with lawyers at hhjtrialattorneys.com.
What Is Gap Insurance?
When there is a difference between the actual cash value paid by the insurance company and the remaining value you have to pay, it is termed a gap, and the amount covered is called gap insurance. It will help you pay off the balance and tackle every financial obligation associated with the lease. However, going through the lease agreement and insurance policy is critical to understand whether you have the gap coverage. If you do not, you can protect yourself from the financial burden by purchasing one and consulting with a car accident attorney.
Steps To Take After Totalling a Leased Car
If you get stuck in a situation of totaling a leased car, then here are the steps you should take afterward:
- You must immediately seek medical attention in case you are injured and get them documented, even if the injuries seem minor. A proper medical certificate can help you file for a future claim.
- Immediately after the accident, you must notify the local law enforcement and file an accident case. You must also gather this accident report and vital documentation for further legal proceedings or insurance claims.
- You must report the accident to the insurance company so that the claim process can be initiated immediately. Also, gather all necessary documentation, including police reports and medical records, to strengthen the case.
- You must inform the leasing company about the accident and mention the vehicle’s status. They will also help you to fulfill any obligations and guide you through specific procedures.
- You must be prepared to cover the remaining balance between the insurance payout and the amount on the lease. So, go through the gap coverage to assess your financial responsibility.
Conclusion
If you face any injury or financial burden due to the accident, you must consult with legal professionals. They will help you explore compensation avenues and navigate the complexities of totaling a leased car.
Also Read: Who Is Responsible for a Winter Weather-Related Car Accident in New York State?
