I paid 12k for my truck and still owed 4k on it. A guy crashed into me and totaled it. The insurance company is offering me 7k based on the “value” of the truck, but they want to keep the truck and expect me to pay the remaining 4k on the loan out of the 7k they gave me. This leaves me with only 3k. Is this legal? I would have had a fully paid off truck, and now I have to take out another loan for the 3k. The insurance company is Statefarm.
Yes, insurance will only pay you the actual cash value (ACV) of the vehicle, regardless of how much you owe. Cars lose value quickly, and you might owe more than the car is worth.
Do you have GAP coverage through your insurance or lender? It could help cover the difference if you’re upside down on the loan.
@Rory
I thought GAP insurance is for when the loan is higher than the car’s value. Since they’re offering more than what I owe, I didn’t think GAP would apply here?
Vic said:
@Rory
I thought GAP insurance is for when the loan is higher than the car’s value. Since they’re offering more than what I owe, I didn’t think GAP would apply here?
My mistake, I thought the 12k was what you owed.
You are only entitled to the current value of the vehicle. Vehicles lose value fast, so it’s common to owe more than they’re worth.
@Rory
GAP wouldn’t come into play because you aren’t upside down on the loan.
My car was totaled a few weeks ago. The other driver was at fault, and their insurance was dragging their feet. I went through my own insurance, and they were much more helpful. The other driver’s insurance ended up paying my deductible, so I didn’t have to pay anything out of pocket.
Yeah, it’s tough when your car is totaled, especially if you still owe money on it. If it’s a total loss, the insurance company will keep the vehicle.
Without knowing your truck’s year, model, or mileage, it’s hard to comment on the 7k valuation. My insurance used a third party to evaluate my car based on sales data, mileage, and condition. They even gave me credit for new tires I bought last year.
@Tallis
There’s no deductible on a third-party claim. You must be talking about your own insurance paying it.
Adair said:
@Tallis
There’s no deductible on a third-party claim. You must be talking about your own insurance paying it.
It wasn’t a third-party claim. The other driver’s insurance paid up front for the deductible when the claim was filed under my policy.
Adair said:
@Tallis
There’s no deductible on a third-party claim. You must be talking about your own insurance paying it.
Wrong. I went through my own insurance company. My deductible was covered by the at-fault driver’s insurance, which accepted 100% responsibility.
Before the accident, you had an asset worth 7k with a 4k loan. After the accident, your loan is cleared, and you receive the 3k difference. There’s no scam here. This is just how insurance works to make you whole again.
Yeah, it just sucks to have to get another loan that will probably cost me more than 12k. I had 4k left on the truck and was planning to keep it for a long time.
Caden said:
Yeah, it just sucks to have to get another loan that will probably cost me more than 12k. I had 4k left on the truck and was planning to keep it for a long time.
One option is to take the other driver to court for damages, especially if you can prove they were negligent. You could file in small claims court for less than $10k. It might be worth talking to a lawyer.
When did you buy the truck? With the extra mileage, do you think it’s still worth 7k?
The price you paid for the truck doesn’t matter now. If you bought it a couple years ago, of course the value would be lower. What you should do is look for vehicles that are as similar to yours as possible, and try to use that as evidence that a replacement vehicle would cost more. You may not get much wiggle room, but it’s worth a shot.
They say your truck’s value is 7k, so you can argue the replacement cost of a similar vehicle. If you can show that’s worth more, you may get a better deal. But, yes, they do get to keep the truck.
I get it. The same thing happened to us with a 2020 vehicle that had less than 40k miles. We had to go through our own insurance because the other driver didn’t have coverage. We paid the deductible and ended up without a car. We were hoping to keep it and pay it off soon, but now we’re starting another loan too.
If the truck’s actual cash value is 7k, then yes, that’s how it works. What you paid or what you owe doesn’t matter. They’ll give you the ACV, not what you owe.
Does your neck or back hurt? 
Micah said:
[deleted]
What are you talking about?
Micah said:
[deleted]
This isn’t how it works. You clearly don’t understand the process, so your advice doesn’t help.
Micah said:
[deleted]
Where is this “fraud department” you’re talking about?