Who gets the total loss check?

If your vehicle is financed then you will need to determine the pay-off to the finance company. The liability insurance company must pay the finance company. They are required to do this by law because the finance company has a lien on the vehicle and title. If there is any money left over after the pay-off, the insurance company will write you a check for the difference. Sometimes the check from the insurance company will have your name and the name of the finance company on it. You may have to sign it over to the finance company. The finance company will pay off the loan and refund the difference, if any, to you as your equity in the vehicle.

If the pay-off on the loan is greater than the check from the insurance company then the finance company gets the entire check and you may still owe the difference unless you had purchased “gap” insurance. (Gap insurance is insurance you purchase when you buy the vehicle. It is sometimes required by lessors for leased vehicles and sometimes provided in financed purchases. Another type of optional insurance you might have purchased is “repair or replacement” coverage. This coverage provides that if your vehicle is damaged, your automobile insurance company will pay either the reasonable cost of repairs or the cost of a new auto, whichever is less). If there is insufficient money to pay-off the loan and you do not have any supplemental insurance, you may be able to use substitution of collateral to get another vehicle and continue making loan payments.

Generally, if you are “upside down” on a vehicle (in other words, you owe more than it is worth) you would normally be at a standstill. If this situation arises, you can ask the dealer where you purchased your vehicle if he would be willing to do a substitution of collateral where you simply substitute the new vehicle for the original damaged vehicle on the same loan.

In a substitution of collateral, the insurance company sends the check for the FMV to the finance company, which in turn sends the Title to the liability insurance company and transfers what you owe on your vehicle to a new loan on another vehicle selected by you and the dealer. This procedure allows you to settle the property damage claim as well as provide you with a replacement vehicle. Moreover, usually you will not be required to make another down payment on the subsequent vehicle. You will usually be required to purchase the subsequent vehicle from the same dealer because they must agree to this procedure.

If your vehicle is not financed, then the liability insurance company will write you a check for the total loss.

Contact a Personal Injury Lawyer from Riddle & Riddle Injury Lawyers for Help Today

For more information, please contact Riddle & Riddle Injury Lawyers to schedule a free consultation with a personal injury lawyer in North Carolina today. We have twelve convenient locations in North Carolina, including Greenville, Raleigh, Goldsboro, Jacksonville, Kinston, Charlotte, Greensboro, Durham, Fayetteville, Wilmington, Winston-Salem & Garner.

Riddle & Riddle Injury Lawyers – Raleigh Office
4600 Marriott Dr STE 500, Raleigh, NC 27612
(919) 876-3020

Riddle & Riddle Injury Lawyers – Charlotte Office
1914 J N Pease Pl Suite 142, Charlotte, NC 28262
(704) 486-5824

Riddle & Riddle Injury Lawyers – Durham Office
100 E Parrish St STE 200, Durham, NC 27701
(919) 728-1770

Riddle & Riddle Injury Lawyers – Garner Office
500 Benson Rd Suite 111, Garner, NC 27529
(800) 525-7111

Riddle & Riddle Injury Lawyers – Greensboro Office
7B Corporate Center Ct Suite 15, Greensboro, NC 27408
(336) 516-9066

Riddle & Riddle Injury Lawyers – Greenville Office
300 E Arlington Blvd Suite 2A #110, Greenville, NC 27858
(252) 397-8620

Riddle & Riddle Injury Lawyers – Goldsboro Office
601 N Spence Ave, Goldsboro, NC 27534
(919) 778-9700

Riddle & Riddle Injury Lawyers – Jacksonville Office
3391 Henderson Dr, Jacksonville, NC 28546
(910) 455-5599

Riddle & Riddle Injury Lawyers – Kinston Office
807 N Queen St, Kinston, NC 28501
(252) 397-8624

Riddle & Riddle Injury Lawyers – Fayetteville Office
2517 Raeford Rd, Fayetteville, NC 28305
(910) 387-9186

Riddle & Riddle Injury Lawyers – Wilmington Office
1608 Queen St Suite 12, Wilmington, NC 28401
(910) 889-4064

Riddle & Riddle Injury Lawyers – Winston-Salem Office
102 W 3rd St, Ste 1007, Winston-Salem, NC 27101
(336) 516-9042