Q: Are we responsible for the difference between what someone still owes on their vehicle, and what the insurance paid?
My wife was in a rear end collision, her fault. Our insurance has totaled out the car she hit (was minor bumper damage, but the car was too old and not worth the fix per the insurance company). The person she hit is now claiming she has no choice but to file a suit against my wife after unsucessfuly trying to get us to pay out of pocket, as she doesnt have the $2500 difference between what she owes on the car even after the $4950 the insurance is giving her. As it stands, she claims shes taking us to court to recoup the 2500 she was upside down on her car. Does she have a case? Isnt this what we carry insurance for? The insurance paid her for the damage my wife caused. The fact that this woman is upside down on her payments isn't our fault, correct?
A: If your wife is sued you need to make a copy of anything you get served with,notify the insurance company by phone, by email, by faxing them a copy of what you got to their attention using the claim # from your wife's claim, and by mail certified return receipt. Generally your company will have had the person they paid sign a release. Second, all your wife was required to pay was the book value of the vehicle or cost of repair.The fact that the persons car is "under water" is something the law doesn't address.
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