If you owe money on your car and had full insurance coverage, does the person who hit you have to pay what you owe or just what the car totaled was worth?

UPDATED: Oct 1, 2022

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If you owe money on your car and had full insurance coverage, does the person who hit you have to pay what you owe or just what the car totaled was worth?

I still owe $13,000 on my car, however the insurance company is only paying not even half of that to the bank .That leaves me with a balance but no car. I’m a

little confused because I’m being left to pay for a car I no longer have. I don’t think that’s right, I need help, do I have to hire a lawyer?

Asked on November 27, 2018 under Accident Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

No, it is unfortunately right.
1) Your obligation to pay for the car is an obligation (a contract) between you and whomever financed the car from you (bank, dealership--whomever). As a contract between you and them, it is not affected by either what another person did or has to pay you, or by anything which is not an action of the lender/dealership/etc. Therefore, your obligation to pay for the car remains unaffected.
2) The law doesn't care about what you paid for the car, since this varies wildly: some people buy for cash, others finance (increasing the total amount paid); some have trade-ins, some don't; some are good at negotiating, some bad; some have a family member or siginficant other give them money for the car or even buy the car for them; etc. Instead, the law uses a factor that will be the same for all cars of the same make, model, year, and condition: it's fair market or blue book value. That is a readily determinable and as "objective" as possible a measure of what the car is worth. Therefore, the at-fault driver (or his insurer) only has to pay the current fair market value, not the remaining amount you owe on the vehicle.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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