If you owe money on your car and had full insurance coverage, does the person who hit you have to pay what you owe or just what the car totaled was worth?
Question Details: I still owe $13,000 on my car, however the insurance company is only paying not even half of that to the bank .That leaves me with a balance but no car. I'm a little confused because I'm being left to pay for a car I no longer have. I don't think that's right, I need help, do I have to hire a lawyer?
No, it is unfortunately right.
1) Your obligation to pay for the car is an obligation (a contract) between you and whomever financed the car from you (bank, dealership--whomever). As a contract between you and them, it is not affected by either what another person did or has to pay you, or by anything which is not an action of the lender/dealership/etc. Therefore, your obligation to pay for the car remains unaffected.
2) The law doesn't care about what you paid for the car, since this varies wildly: some people buy for cash, others finance (increasing the total amount paid); some have trade-ins, some don't; some are good at negotiating, some bad; some have a family member or siginficant other give them money for the car or even buy the car for them; etc. Instead, the law uses a factor that will be the same for all cars of the same make, model, year, and condition: it's fair market or blue book value. That is a readily determinable and as "objective" as possible a measure of what the car is worth. Therefore, the at-fault driver (or his insurer) only has to pay the current fair market value, not the remaining amount you owe on the vehicle.