Posted in Car Accidents on February 15, 2022
Getting into a car accident can be a scary experience. Unfortunately, the aftermath of the accident often becomes confusing, especially when dealing with the insurance carriers. If you lease your vehicle get into an accident, there are certain things that you need to know that could affect your claim, including information about lease payments and GAP insurance.
Regardless of whether or not your vehicle is leased, it is important to treat this situation just like any other vehicle accident. You need to call 911, let law enforcement officials investigate the incident, and seek medical treatment for any injuries you sustain. Recovering compensation will depend on determining fault, and this revolves around gathering evidence related to the vehicle accident.
That car will be considered” totaled” in Georgia when the actual cash value of the vehicle is equal to or less than the costs associated with repairing the vehicle. In other words, if it is going to cost the insurance carrier more to repair the vehicle than the vehicle is worth, the vehicle is going to be written off as a total loss.
A key point to make in these situations is determining the fair market value of a vehicle. This is not the same dollar amount that you paid for the vehicle, regardless of whether or not you bought it as new or used. Additionally, the fair market value is not the same as what is outstanding on your lease. Rather, a vehicle’s fair market value is the retail value based on local market conditions at the time the crash occurs. This can fluctuate depending on various outside influences, particularly the overall vehicle market.
The aftermath of a vehicle accident involving a leased vehicle would look just like most other car crashes that occur on Georgia’s roadways. However, there are additional complexities when you are dealing with a leased car that gets totaled. In addition to contacting your insurance carrier and letting them know about the accident, you will also need to notify the leasing company. Remember, when you lease a vehicle, you are not paying on a loan to eventually own the car; you are leasing a vehicle that is supposed to be turned back in eventually, typically after three years.
You have to bring your vehicle to the repair shop. If the repairs are significant enough, the insurance carrier will write off your car as totaled. This can be a problem because when you sign a leasing agreement, you agree that you will return the car in an acceptable condition when the lease is finished. If the car is totaled, you are on the hook for the remaining lease balance. That is why having adequate insurance coverage is so important in these situations.
If another driver caused the crash, their insurance carrier should be on the line for the repair costs. However, the at-fault driver’s insurance carrier is only going to pay for damages up to the limits of their policy, which may not be enough to cover the total costs. If you lease a vehicle in Georgia, you should carry GAP insurance, which is an additional type of insurance.
If your vehicle is totaled, the insurance carrier will cover the cost of replacing the vehicle up to the fair market value, but the fair market value of the vehicle may be less than what you owe the leasing company under your lease terms. In this case, you would be required to to pay the difference out of your own pocket. If you have GAP insurance, this will cover the discrepancy between the two values. We strongly suggest that you carry this type of insurance because the value of your vehicle will typically always be less than what you owe on your leasing agreement.
Contact our Atlanta car accident lawyers today.
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