If our son wrecked his friend’s motorcycle but the insurance company didn’t cover the total payoff, are we responsible to pay balance?

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If our son wrecked his friend’s motorcycle but the insurance company didn’t cover the total payoff, are we responsible to pay balance?

My young adult son had an accident on his friends motorcycle, that he had permission from his friend to ride even though he doesn’t have an endorsement for it on his license. Subsequently totaled the bike and had several injuries himself including broken bones, one of which required surgery, plates and screws. The bike had full coverage, the friend’s dad told me their insurance would cover medical expenses, it has, up to $1,000. I am up to $3,500 out of pocket after our health coverage and the bike insurance at this point. I immediately offered to pay the $500 deductible on the bike insurance and that was the end of it. A week later I get a text message stating that they had a $20,000 note on the bike,

insurance only paid $12,000 and I needed to cover the remaining amount. I’ve asked for copies of the insurance claim payout and the bank payoff, since only days prior, the friend stated he had received a check from insurance for $17,000. It feels a little sketchy, nevertheless, legally are we responsible for the remaining balance on the bike?I personally wouldn’t let, for example, someone without a license drive my car, yet

they allowed someone without a motorcycle endorsement to ride their bike. I hate

that all of this has happened, but I’m mostly grateful my son isn’t in worse shape

than he is.

Asked on July 3, 2017 under Accident Law, New Mexico

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If they were paid the then-current fair market value of the motorcycle, you are not responsible for the remaining balance on the motorcycle. When a vehicle is damaged or destroyed by someone, the owner is entitled to what the vehicle is then worth, which may be less than they paid or owed (e.g. if the financed it) or more (if it was a gift, for example). They are only entitled to the motorcycle's "blue book" value, and if they wanted to be protected against having to pay the remaining balance on a totalled motorcycle, they should have  purchased "Gap" insurance.


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