A leased vehicle lets you enjoy the luxury of a newer car without the commitment of buying, but it does complicate matters when you’re involved in an accident. If your leased car is totaled in a crash, you may wonder what you’ll have to pay and your next steps.
But if you’ve been injured in a car accident due to someone else’s negligence, it’s wise to consult an experienced personal injury attorney. A lawyer can help you understand how having a leased vehicle impacts any potential claim for damages and what you can expect regarding compensation.
When is a Car Considered Totaled?
A car is generally considered totaled if the cost of repairs exceeds its actual cash value. After an accident, the insurance company will determine whether a car should be repaired or totaled out. At that point, the insurance company would rather call the vehicle a loss and compensate for the vehicle’s value.
How Insurance Works for a Lease
You agree to return the vehicle in working condition when you lease a car. If you drive more than the number of miles stipulated in your lease, you will have to pay extra. Since you obviously cannot return a totaled leased car, the leasing company will expect additional compensation beyond your monthly payment.
Any compensation they would pay to the vehicle owner will go to the leasing company. At a minimum, in Nevada, you’ll need $25,000 in bodily injury per person, $50,000 in bodily injury per accident, and $20,000 in property damage. However, the leasing company will likely require more coverage as part of your contract.
If you total a car worth $30,000, the insurance company will pay $30,000 to the leasing company, assuming there is enough coverage. This will cover some of your obligations. But what if you owe $34,000 on the lease?
Gap Insurance for Leased Cars
That is where gap coverage comes in. This type of insurance pays the “gap” between what your insurance pays on the value of the car and the actual amount due to the leasing company or lender. In the above example, gap insurance would pay the remaining $4,000 to the leasing company. This is often optional when you own a car, but most leasing companies require it. It saves you from paying additional money out of pocket.
Steps to Take After Crashing a Leased Car
If you are involved in an accident in a leased car, you’ll want to take the same steps you would take if you were driving a vehicle you owned. Use this list to protect yourself after a crash:
- Call for assistance and report it. If anyone is injured, you’ll want to call emergency services. If not, you may call the non-emergency line to report the accident to the police.
- Take photos. It can also be helpful to get video footage of the scene. Ensure you capture all damage to your vehicle and take pictures of your injuries.
- Ensure your side is included in the police report. This is part of what the insurance company will use to determine who is at fault, so you don’t want the other driver’s story to be the only one in the police report.
- Exchange contact information. You should exchange contact and insurance information with the other driver. If any witnesses stopped to help, get their contact information as well.
- Contact an attorney. The attorney can help you pursue compensation from the other party and figure out what is owed to the leasing company.
How an Attorney Helps When Someone Else is At Fault
This is a lot of inconvenience for you. Not only do you have to figure the situation out with your leasing company while possibly injured, but you’ll also likely have to spend time lining up a new vehicle. Even with the right insurance, it gets expensive very quickly.
If you were in an accident that wasn’t your fault, an attorney can help you pursue compensation from the liable party. This can help you get reimbursed for your deductible, pay back your leasing company, and be compensated for your expenses.
Why do you need an attorney? The answer is simple — the other party’s insurance company is not on your side. Their goal is to close their case file as quickly as possible, not to pay you what you’re owed. Your attorney can handle negotiations while you focus on healing.