What happens if my car is totaled and I still owe my loss payee money?

If you still owe your lender money, but your vehicle is totaled, hopefully you were smart enough to follow the guidelines and purchase adequate insurance. If you did not purchase enough insurance, you may have to pay for all damages out of your own pocket, which can get ugly. The first thing you should always do whenever purchasing a new vehicle and dealing with a lender is to make sure you have enough insurance coverage.

Individuals that did not purchase what’s known as “gap insurance” are going to have to pay the difference (between the value of the vehicle and the unpaid loan balance) out-of-pocket if their car is totaled. For this reason, it is always recommended that you get an insurance policy that will have your back should you be unlucky enough to ever have your vehicle totaled in an accident.

Will my insurance company pay me or my loss payee?

It is important to know who is going to be the primary recipient of money from your insurance company following an accident. In many cases, the loss payee (also commonly known as the “car insurance lien holder”) will be the one who directly receives the money from your insurer. It all depends on the type of contract that you entered though, sometimes you may be the primary recipient of the money if you and your lender have a different agreement.

For a hypothetical example, let’s say that you owned a vehicle valued at $16,000 that was unpaid. If it is brand new, it still likely is close to full value at $16,000 – so if it is damaged and you have enough insurance, you will be fully reimbursed for the $16,000 (you will likely need gap, comprehensive, and collision coverage). Anyways, if you totaled your $16,000 vehicle and your loss payee is the one receiving the insurance reimbursement, they will be given the money and you will be credited for what you have been given.

If you still owed $4,000 on your vehicle – the loss payee would initially pay off the remaining $12,000 on your account before they send you the $4,000. So you may have to wait extra time for the check to go through and be issued and processed in your bank account.

Should I add my lease company as a loss payee?

If you are leasing a vehicle, you may not be given a choice as to whether you should list the company providing you with the lease as a “loss payee.” Sometimes you may be required by your lease company to list them as a loss payee because you are not yet the rightful owner of the vehicle. The reason that they may contractually demand to be listed as the payee in the event of a loss is because they want to make sure they get all of the facts straight and collect what they deserve from the insurance company before you get your fair share of the money. Technically speaking, insurance can get quite complicated because the lease company can actually be dragged into certain claims and settlements. For this reason, most will require that you list them on your policy.

Isn’t it up to me to decide whether I include my loan lender as a loss payee?

Most of the time it is NOT up to you to make a decision regarding the loss payee. Why isn’t it up to you? The reason that it isn’t up to you is because you don’t have enough money to pay off your vehicle. Since you are the person receiving money to help make payments, the company that is lending you the money deserves to get paid before you do.

Hopefully all of this makes sense to you because it really isn’t too complicated. All it involves is your lender collecting money from your insurance company to make sure they get their fair share, and then they pay you what you deserve from the remaining balance.

If you would like free quotes and to find out more about the loss payee on your car insurance policy, be sure to enter your zip code and check out the reliable providers in your area.

What is the purpose of having a VIN?

Vehicle Identification Numbers were first used back in 1954, but they have evolved in terms of looks as well as in terms of security. Some of the newer ones look so sleek that if your car is stolen, the criminal may completely forget to even check for a VIN. Although not all car insurance companies will offer discounts for having a VIN inscribed onto your vehicle, some certainly will give you a lower rate because if your vehicle is stolen, there is a greater chance that the police will be able to track it down and recover it.

What if the original VIN plate is removed by a criminal?

If a thief were to remove the VIN plate from your vehicle, most people still have their numbers inscribed directly onto their glass windows. This is much tougher to remove and most thieves aren’t smart enough to get full window replacements. When police do an investigation for a missing vehicle, one of the things that they can look for to verify a stolen car is the identification number (on the windows) that the criminal may not have replaced.

Not only could your windows be inscribed though, you could have a VIN located anywhere on your vehicle. It really is just a matter of having the ID number inscribed wherever you see fit. Some people have it embedded in sneakier locations than others including the trunk, underneath the hood, on the engine, and more. It really doesn’t cost much money to have the number embedded in

How much money can I save on insurance with my VIN?

Although having a VIN can reduce your insurance rates, it likely isn’t going to result in major savings. Compared to something like a GPS device or satellite tracker, your vehicle isn’t as equipped with technology. Police will not be able to use digital tracking to recover your vehicle from a thief if it gets stolen. With that said, it certainly is better than having zero form of identification on your vehicle.

For example, let’s say that you own a blue Honda Accord and it was stolen. If you didn’t have a VIN, a police may see 10 blue Honda Accords in a single day of similar make and model. He may not know which one could be the one that is stolen – especially if they were all the same make and model. So what will help the officer determine which blue Honda was the stolen vehicle? The vehicle identification number (VIN) is what they will be looking to find.

Having a VIN may save you a few extra dollars per month, but in combination with a GPS tracker, an alarm system, and other technology, you may stand to save a lot more. It is really the combination of all your safety devices that will determine how much money you save. So just having a VIN by itself really isn’t that impressive. But having it with a lot of other security features is definitely going to save you some money.

Getting a VIN on your vehicle to save money on car insurance

If you want to find out the exact dollar amount that you could save by having a VIN placed strategically on your vehicle, it is important to contact your insurance company. If you want to get in touch with multiple insurers, you can use the quote form at the top of the page to compare overall costs, savings, and discounts among providers. If you already have a VIN, hopefully you are using it to your advantage and have discussed potential savings with your insurance provider!

If you look at the data and statistics collected, the average price for insurance has gone up in comparison to the price of most goods. The problem is that the insurance industry has become what some consider a monopoly, but not only for auto insurance. Health insurance, homeowners insurance, life insurance, and other various genres of insurance seem to be charging steep prices for good coverage.

What is tort reform and how could it help reduce car insurance rates?

Tort reform basically refers to changes in civil law justice systems to reduce damages or litigation. The official definition refers to wrongful action done from one party to another – and is downright unethical. Whenever one party breaches contract and does wrongs to another civil party, the court system awards financial compensation to the party that has been wronged or cheated.

You probably already realize that the legal system isn’t in total alignment with fair settlements these days. If there is a bad car accident and someone files a lawsuit against another party for proper compensation, there really are no exact financial limits that a juror can award the victim. This is why it is fairly common to see accident victims collecting millions of dollars for damages through their insurance company.

If the system of tort reform were introduced into the legal system, the amount of money that the individual could be awarded would be in direct proportion to their damages. In other words, there wouldn’t be excessive claim amounts and the settlements would be fairer. Most victims of serious accidents are able to collect millions – and sometimes, these millions being collected aren’t fully justified.

How the current car insurance system works

There are some major drawbacks associated with the way that our current auto insurance system works. The major drawback is that if you are a person that caused an accident and ended up getting taken to court, you could be sued for a lot more money than without a tort system in place. So if you inflicted $50,000 in damages to another party as a result of an accident that you caused, you may end up having to pay $200,000 in a settlement to avoid court.

Although the insurance system works well for the people that are victims, most people that get sued end up having to pay significantly greater amounts of money than necessary. People are able to collect money for all sorts of damages including: psychological, medical, and being disabled. Insurance settlements are sometimes extremely high based on what you can sue for. For every big winner (in terms of finances), there is always generally a big loser with the current system in place.

What is the major advantage of tort reform for insurance?

Really the major advantage that a tort reform would offer is that it would help prevent rates from further increasing. The reason that it would prevent rates from continuing to increase is because insurance companies wouldn’t have to pay quite as much money on big ticket settlements. For example, if someone was suing for $500,000 worth of damages, the juror would do an investigation to see whether the victim actually deserves the full amount of money.

Court settlements would be a lot fairer – and based on more factual evidence than they are currently. If you were filing a lawsuit for injuries, you would have to prove those injuries in the court of law. Although you currently may have to prove injuries, the out of court settlements become inflated significantly higher than necessary in most cases where an accident victim is injured.

Major disadvantage of a tort reform system?

There are some disadvantages associated with this system as well. The primary disadvantage is that if you were an accident victim, it would be tougher to collect what you rightfully deserve. You would be more responsible for coming up with evidence and proving your case to a jury. This may be considered a disadvantage to some, but if you try to think in terms of “fairness” – this system would be awarding victims the proper amount of money instead of a large sum – regardless of whether they fully deserve it.

What do you think about tort reform and car insurance?

Although some research shows that the average person would save hundreds of dollars each year on their premiums, if you look at the facts and consider all the possibilities, it is unlikely that people would save hundreds. What is more likely is that they may save a little bit of money and/or not be subject to the trend of increased rates over time.

I personally think that the system is an interesting concept, but would require some innovative minds to make it function properly. The way that the insurance industry is currently run may seem like a monopoly to some, but in the end, they are just trying to help people stay protected while on the road. Hopefully you too realize that they are other things you can do in order to reduce your risk and save money.

In fact, one of the most common ways to save hundreds per year is by comparing rates offered by other insurers. At the top of the page, we offer a 100% no-risk, free tool, that will allow you to enter your zip code and get a free quote comparison from all of the leading insurance providers. So please check it out so that you don’t miss any savings!