Contrary To What Most People Believe, The Insurance Company Is Not Required To 'Pay Off' Your Vehicle Loan.
The amount of money that the insurance company will pay to buy your vehicle has nothing to do with the amount you still owe on your vehicle, if any. Burtless v. Pallers, 570 So.2d 1140 (Fla. 4th DCA 1990). If you still owe money on your vehicle, the insurance company will first
pay the finance company to which you owe money to on your vehicle. You
will receive only the amount of money that is left over after your loan is paid off, if any. So, if you owe more on your vehicle than it was worth when it was destroyed, you will not receive any money for your vehicle at all
(because all of the money will go to the finance company to which you
owe money on your vehicle). What's worse, if you agreed to pay too
much for your vehicle, you might even still owe money to the finance
company on your vehicle after the insurance company pays the
finance company all that it is legally required to pay (in addition to
you being without a vehicle, and in addition to you not receiving any
money for your vehicle that was destroyed in the accident). This
problem is called being "upside-down". This "pay-off" problem is not
usually caused by the insurance company. Instead, it is usually caused
by dishonest vehicle dealers who knowingly sell vehicles for more than
they are really worth (usually a "Buy Here Pay Here"-type dealer). The
insurance company is not obligated to reward a dishonest
vehicle dealer (or a dishonest finance company affiliate) by paying
them more for your vehicle than it was really worth if it is destroyed
in an auto accident just because you agreed to do so.
For more information about Vehicles Involved In An Accident in Orlando contact Hanson &
Hanson, P.A. today at 1-800-426-7662 to schedule your free initial
consultation. More information about Orlando Auto Accidents can be
found in the practice areas section of our website.
