If I was at fault for an auto accident and my car was totaled, what can I do if my insurer is only paying a part of the amount that I still owe on my loan?
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If I was at fault for an auto accident and my car was totaled, what can I do if my insurer is only paying a part of the amount that I still owe on my loan?
My insurance company totaled my car out, paying only approximately $5000 of the approximately $8000 I owed on this vehicle. Is there any way for me to claim the remaining $3000 (approximate), either by suing my insurer, suing the other person’s insurer (I don’t know who this is but can probably find out), or deducting this as a loss on my state and/or Federal Income Tax?
Asked on January 21, 2016 under Accident Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Unfortunately, no:
1) If you were at fault, neither the other driver nor his/her insurer is liable for your loss; only the at-fault person--which, according to what you write, is you--is liable.
2) Unless you purchased some form of "gap" insurance to pay off the rest of any loan or financing, your insurer only has to pay the then-current fair market (or "blue book") value of your car, not the price or remaining loan to buy it.
3) This is not, I believe, a tax deductible loss, but checking with a tax professional (e.g. CPA) would be a good idea.
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