What Happens If You Total a Leased Car?

Roughly one-third of the vehicles on the roadway are leased. Just as any other vehicle, a leased vehicle can become damaged in an accident. A common question among those who have had their leased car totaled after the accident is: “What happens now?”

Injuries and totaled vehicles often occur together. If you have been injured in an accident that also totaled the vehicle, you can seek compensation for both the injury and the property damage through the personal injury claims process. An experienced car accident lawyer from Pacific West Injury Law can assist you in this process.

When Is a Vehicle Considered Totaled?

According to Kelley Blue Book, insurance companies “total” a car if the cost to repair the damage is as much as the value of the car before it was damaged. In fact, many times, the insurance company will total the car even if the damage is less than the value. In some states, the standard cost of repair that will result in totaling the vehicle is 60-70% of the value of the car.

Why the Insurance Company Will Total a Car Even if the Damages Are Less than Its Value

Generally, the estimated cost of the damage is made by the adjuster by studying photos of the car’s exterior and undercarriage. However, once mechanics begin taking the vehicle apart to repair it, they often uncover additional damage. If the damage before looking inside the vehicle is below a certain threshold, then additional damages can likely be covered by supplemental claims.

However, if the damage is close to the vehicle’s value before a substantive inspection, then it is assumed that the cost of a complete repair will likely equal or exceed the value of the vehicle.

Totaling a Leased Car

When you total a leased car, you will certainly need to report the accident to the company that holds your lease. Additionally, you will need to report the accident to your own insurance company. Depending on the circumstances of the accident, if your vehicle was damaged as the result of an accident caused by another driver, you can also file a claim against the at-fault party’s auto liability insurance policy.

Even if you can no longer drive the vehicle, you still owe the amount of your lease. If the insurance company opts to total the vehicle, they will pay you the total value of the vehicle. However, this is often less than what is owed, as you are paying interest and other charges on top of the vehicle’s value through your lease.

Most lease contracts require the provision of gap insurance, which can cover the cost of the difference between the vehicle’s value and the amount you owe on your lease.

What Your Own Insurance Covers

There are three types of insurance coverage that you might have that can cover the expenses of your vehicle repair, depending on the type of accident you were involved in.

• Collision insurance pays for your repairs if you are in an accident with an immovable object, such as a fence or a light post.
• Comprehensive insurance covers damages incurred due to weather-related events such as wind or hail, damage resulting from collisions with animals, or even damage caused by vandalism.
• Uninsured and underinsured motorist policies provide coverage for damages incurred as a result of an uninsured driver, a driver who does not have enough insurance to compensate your expenses, or a hit-and-run driver.

As explained by Progressive, most lenders require that leased vehicles have comprehension and collision coverage.

Filing a Claim Against Someone Else’s Insurance

If the accident that damaged your leased vehicle was caused by someone else, you can seek compensation for the cost of the vehicle’s repairs — or in the case of a totaled vehicle, the value of the car before it was wrecked  – by filing a third party insurance claim with the provider of the at-fault party’s automobile liability insurance policy.

When you file a third-party insurance claim, the claim is assigned to an adjuster. The adjuster is someone who is employed by the insurance company to investigate claims and determine how much to pay in order to resolve claims. The adjuster will offer a settlement to resolve the claim. If you do not agree to the amount, you can counter-offer and negotiate. However, if you agree with the offer, then the company will process your payment, and you will sign over a salvage title of your leased vehicle to the insurance company.

Seeking Compensation for Your Leased Car Through a Personal Injury Claim

If your leased car was totaled in an accident in which you were also injured but not at fault, you can seek compensation for both the expenses and impacts of your injury as well as the damage to your vehicle through a personal injury claim. An experienced personal injury attorney can provide services to assist you in this endeavor, including:

• Helping you to determine who was liable for the accident
• Establishing a value to your claim based on the severity of your injury, the financial and psychological costs you incurred, and those you will likely incur in the future
• Negotiating with the insurance adjuster in order to obtain an offer that constitutes fair compensation for your claim
• Handling the court process if the adjuster fails to offer you a fair settlement and you need to seek compensation through the court
• Assistance collecting your settlement or award

It should be noted that in accidents resulting from negligence, the claimant’s own insurer often covers the costs of vehicle repair or replacement and then seeks the amount paid from the at-fault party’s insurer.

An Experienced Attorney Can Help

Let the experienced legal team at Pacific West Injury Law help you fight for compensation for the expenses and impacts of your injury, as well as damage to your leased car that was incurred in the accident. Contact us for your free case evaluation.