What happens if you total a leased car? If you total a leased car, the insurance company will provide you with coverage up to the limits of your policy or the at-fault party’s policy.
Navigating an accident claim with a leased vehicle may present various challenges that a Las Vegas car accident lawyer can help overcome.
How Leased Cars Work
A leased vehicle means that you are renting it for a long period of time and not officially taking ownership of it. You will make monthly payments to the leasing company for a period of time, but during this timeframe, you will be responsible for that vehicle. That includes maintaining the vehicle and keeping it in good condition.
It is not uncommon for accidents to occur with a leased vehicle. When that happens, your insurance, which is typically in place for up to the current value of the vehicle or the owed balance on the car, maintains financial protection for you and the leasing company. Typically, your policy will pay out the value of coverage allowable, covering the value of the lease first.
It is important to note that the leasing company maintains ownership of this vehicle, and as such, it also has the right to make decisions about it. They may elect to have the repairs completed, or they may feel the vehicle must be totaled because the damage is too severe. The decision here could ultimately impact your situation if you total a leased car, and a Las Vegas personal injury lawyer can answer your questions.
What Happens in a Typical Situation
In many situations, accidents occur, policy claims cover them, and you maintain your vehicle and complete your lease agreement. In situations of serious damage to the vehicle, the first step is always to determine if the insurance company will cover the damage to repair it or if it will total the car. Totaling it means that it is no longer worth repairing, and the insurance company pays a lump sum for the value.
In many situations, the insurance company will then value the car, basing this value on the condition of the car prior to the accident. Once the valuation is complete, the insurance company will pay the leasing company the actual cash value of the vehicle. This is less any deductible that may apply in the situation.
There may be times when the total payment that you owe on the lease is more than the insurance company pays, thanks to depreciation of value over the long term. In this case, you could be responsible for the difference and must pay the leasing company the value. This is offset by gap insurance, which could cover some of your additional losses if you have it, all of which plays into what happens if you total a leased car.
What Happens in a Personal Injury Case With a Totaled Leased Vehicle
If you have a leased vehicle and get in an accident, and the other person who hit you is responsible, that could change the consequences of what occurs next. Your car insurance may still cover the incident, but the at-fault party is ultimately at fault for the losses you have, as well as the losses suffered by the leasing company. In this case, you can expect the following:
- The at-fault party’s insurance company evaluates the vehicle
- That company determines if the vehicle is totaled or repairable, though you may be able to dispute this if you do not think their claim is accurate
- You come to an agreement about the amount of settlement owed to you with the insurance company or, if that is not possible, you must file a claim through a lawsuit, and let the court and judge determine the value
- The insurance company pays what it owes, but the payment goes to cover the balance on the leased vehicle first, covering all or most of the cost
- If there is not enough value to cover the portion you owe, you may still be held responsible for the balance owed to the leasing company
In situations like this, the losses can be complex, and insurance companies may do all they can to minimize the compensation they receive.
For that reason, any time someone strikes you and causes injury and loss to you, you should seek legal action against them with the guidance of a Las Vegas car accident lawyer. Failing to do so puts your case at risk.
What to Do After Your Accident in a Leased Vehicle
If you are in an accident with your leased car, prioritize your safety and well–being by calling 911 and getting medical care. When possible, document as much as you can about the accident, including the contact information of the other party and photos of the surrounding area, and report it under NRS: Chapter 484E – Crashes and Reports of Crashes. Once you start healing, you can contact our attorney to start working with you to build a claim.
Avoid making any statements to the police beyond just the facts. You may need to file a police report and alert your insurance company about the incident. At that point, let your attorney help you build a claim that will include all of the losses you have, including the damage and loss of the vehicle.
With the guidance of an attorney, you have a good chance of optimizing your claim to cover all of your losses, which may include the full value of the vehicle to cover your lease cost. The key here is to act quickly to get legal help. Do not agree to settle your claim with the insurance company until you have legal representation.
Seek Out a Consultation with Our Legal Team for Guidance on Your Case
Being in a car accident is stressful. If you total a leased car, know that you have the right to pursue fair compensation in your case, which may include more than just your vehicle’s loss.
Seek out the guidance of our team at H&P Law today to find out how we can help you recover those losses.
