by randtgorman » Thu Dec 16, 2010 01:28 pm
My daughter lives in Dallas and was hit by a drunk driver over a week ago. Dallas County just released the paper work after alot of hounding. My daughter let her insurance laps on a auto with a lean(had to choose between the note or ins. due to loss of job, didnt tell me!) The drunk totaled her car, no major injury's. Im worried about the time frame of his Insurance covering the loss of the car, because of the no-ins on her part and his DWI. Should I be? Will her car be paid off?
Posted: Thu Dec 16, 2010 01:45 pm Post Subject:
If her damages are the result of a third-party, then the responsibility for those damages rests on the third-party. The only thing about having your own coverage is the ability to have your company cover the loss and allow them to go after the third-party for their losses.
Now, as a condition of her loan, the lender usually requires continuous collision coverage. If you let your coverage go, they typically obtain high-cost coverage and add the cost to the loan balance. So even though her personal auto policy may have lapsed, there might be coverage for the lienholder (but not your daughter).
The bigger issue is recovery for personal injury. Most states have adopted the principle that if you do not have your own liability insurance at the time of an accident, then you cannot sue for general damages ("pain and suffering") -- you can only collect your actual damages (property damage, medical bills, lost wages).
Will her car be paid off? Probably not. Without "GAP" insurance (guaranteed auto protection), any shortfall between the pre-loss value of the vehicle and the loan balance is the responsibility of the borrower. First-party insurance or third-party insurance, doesn't make any difference. If the insurance company pays $2000 and the loan balance was $3000, there is still $1000 that must be paid to the lender to settle the debt.
That's why cars make lousy security and GAP coverage is often a lifesaver for the borrower, or a profit maker for the insurer.
Posted: Thu Dec 16, 2010 04:33 pm Post Subject: Will I be covered?
Thanks. That helps alot. I cosigned for the loan, and insisted on the GAP Ins. so that I know I have. I was just nervous about getting it all paid by his insurance company, or through the un-insured motors portion if that is all he had. My daughter has contacted the other guys insurance and filled a claim, they just need the accident report. Dallas County has been sitting on it for some unknow reason. Talk to an officer there today and they said they have had it on there desk the whole time. Why would 4 other people tell me it wasnt there? Just want to get out of this mess, without to much out of pocket.
Posted: Thu Dec 16, 2010 09:14 pm Post Subject:
I cosigned for the loan, and insisted on the GAP Ins. so that I know I have.
But I thought you stated your daughter allowed the coverage to lapse. If that's true, your GAP coverage evaporated along with everything else.
Why would 4 other people tell me it wasnt there?
It's often referred to as "being lazy." Not motivated to get off one's A** to look at a stack of paperwork.
You need to determine whether there was any coverage on your daugther's vehicle at the time of the collision. If there was, you'll probably be OK, if not, someone may still owe the lender some money.
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