Anybody Know How Insurance Claims Work When You Still Owe The Bank $$$

[NDENT]

Lets say i owe the bank $15,000 which i already paid them about $4,500 & my car gets stolen & the insurance company puts it at a lost. who does the insurance company pay ? do they just cut the bank out a check for what the car is worth & i lose out my $$$ or do they just pay the bank what i owe them & write me a check for the rest ?

 

[StageLeft]

If you owe the bank $15k and the car is worth $18k and insurance company pays $18k, they'll give $18k to bank and you get the rest. One way or the other the bank needs what you owe them. Not more, and not less.

 

[NDENT]

So if i only owe the bank like $10,000 & the car is worth $13,000 the bank takes there 10 & sends me the other 3 ? also what happens with the $$$ that i paid the bank ? do i lose what i put down for the car along with the payments i made over the months.

 

[TerryMathews]

Originally posted by: NDENT
So if i only owe the bank like $10,000 & the car is worth $13,000 the bank takes there 10 & sends me the other 3 ? also what happens with the $$$ that i paid the bank ? do i lose what i put down for the car along with the payments i made over the months.

Yes, you lose that.

 

[freebee]

They will contact the lienholder first to determine the amount outstanding on the lien. Your coverage pays up to the market value of the car. So, if you owe more than the car is worth...too bad for you... your insurance company only pays up to what the car's actual value is.

If your car is declared a total loss, (in which the repairs would exceed a certain % of the market value..sometimes seens as a CCC evaluation, depending on estimate systems) if you don't carry gap insurance, you're screwed. You owe your bank for the outstanding amount.

However, if the damages are less than the market value of the car, you are issued a two-party check. that your lienholder must endorse, before you can cash it. Please contact your lienholder for the specific process.

 

[freebee]

edited.

 

[StageLeft]

Look it's this simple. You buy a car for 20k. Let's assume no depreciation. You give the bank $5k. You now owe $15k on the car, right? Your car is totalled and the insurance company pays out $20k (value of the car). The bank is owed $15k, so they will get $15k. You will get the remaining $5k.

 

[DrPizza]

Originally posted by: Skoorb
Look it's this simple. You buy a car for 20k. Let's assume no depreciation. You give the bank $5k. You now owe $15k on the car, right? Your car is totalled and the insurance company pays out $20k (value of the car). The bank is owed $15k, so they will get $15k. You will get the remaining $5k.

But, unfortunately, you buy a car for 20k. You drive it off the lot. It just depreciated to 18k.

 

[RossMAN]

I'm glad I pay the extra $2/mo for gap insurance.

Let's say car is stolen, I owe $12k, insurance company says it's only worth $10,500. I'm stuck paying the difference of $1,500. With gap insurance they payoff the entire loan amount.

 

[DT4K]

Originally posted by: NDENT
So if i only owe the bank like $10,000 & the car is worth $13,000 the bank takes there 10 & sends me the other 3 ? also what happens with the $$$ that i paid the bank ? do i lose what i put down for the car along with the payments i made over the months.

What you've paid is irrelevant. The insurance company will pay the current market value of the car. If that value is more than what you owe the bank, the bank will get their money and you will have some left over. If that amount is less than what you still owe, the bank will get all the money and you will still owe them money unless you have gap insurance.

 

[KenSr]

Originally posted by: NDENT
So if i only owe the bank like $10,000 & the car is worth $13,000 the bank takes there 10 & sends me the other 3 ? also what happens with the $$$ that i paid the bank ? do i lose what i put down for the car along with the payments i made over the months.

The bank gets what ever the payoff amount is.
You get the difference between what is owed, and what they determine it is worth.

 

[Pacfanweb]

You didn't lose anything. You used the car for a time, and drove the value down while using it. That's what you made the payments for.
Doesn't matter how much you put down, or paid in payments.....all that matters is how much you owe the bank on the car, and how much it was worth at the time of loss.

If it's less than 2 years old, just thank your lucky stars if you don't have to pay extra, much less get any money back.

 

[NDENT]

K so gap insurance is the way to go correct ?