If I have a bank loan with my car and mobile home as collateral and my car was totaled, what happens to the bank loan if I have auto insurance?
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If I have a bank loan with my car and mobile home as collateral and my car was totaled, what happens to the bank loan if I have auto insurance?
Asked on January 17, 2012 under Accident Law, Georgia
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you were paying a loan for the car that you were purchasing and the car was totaled, you are still obligated to pay off the loan. The issue is whether or not the policy of insurance for the vehicle that you were driving will be enough to pay off the loan in full or not. If the insurance proceed do not cover what is owed on the loan, you will have to come out of pocket to pay off the balance.
Your question is a good example as to when one is paying off a car loan that the person has a policy of insurance in place to pay off the full amount owed on the loan should the vehicle get totaled.
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