What Happens If You Total a Leased Car?

What Happens If You Crash a Leased Car?

If the Vehicle Is Not Totaled

If you are in an accident with a leased car, you should have full coverage insurance, just like you would if you had a loan on the vehicle.

Since Florida is a no-fault state, your insurance should cover repairs. Once repairs are made, your lease continues. 

However, you may be entitled to seek reimbursement from the other person’s insurance if they were at least partially at fault for the accident and there are serious injuries.

Therefore, it is crucial to speak with an experienced car accident lawyer following your accident to determine if the other driver or any other parties could be liable. 

If the Vehicle Is Totaled

If the leased vehicle is totaled, you will need to pay off the lease using the insurance money. 

You will also need to pay off the vehicle’s current value, which is often determined using current Kelley Blue Book or NADA (North American Dealers Association) values. 

Depending on how long you have had your leased vehicle, the current value, due to depreciation, could be less than what you owe on your lease.

Hopefully, you purchased gap insurance as part of your lease as well. Gap insurance will cover the difference between what your insurance will pay and the amount owed on the lease. However, if you owe less than the amount received, you can roll the balance into a new vehicle lease.

In addition, you may be able to claim compensation through Florida’s no-fault laws or from the responsible driver by filing a car accident injury claim. 

To find out if you could seek damages and qualify to file a claim from the responsible party, speak to a leased car accident injury attorney today.

Who Pays for a Totaled Leased Car in Florida?

Your insurance provider pays the leasing company actual cash value and gap insurance covers the remaining lease balance if insurance payout falls short. If higher than owed, surplus goes to you. Gap coverage fills the gap between ACV and payoff; leasing companies often require it often.

Without GAP insurance, you owe money out-of-pocket for early termination fees. You’re responsible for deductible – many leases auto-include GAP as ‘waiver of responsibility’.

Where Do I Report a Leased Vehicle Accident?

Most leasing agreements have specific instructions for reporting an accident. Not following them can lead to complications. Typically, you should report the accident to:

A. Your Auto Insurance Company

Notify your auto insurance company about the accident to start the claim process. Your insurer will send an adjuster to assess the damage to arrange for repairs or determine if the car is totaled.

B. The Dealership or Leasing Company

You also need to inform the dealership or leasing company since they own the vehicle. Ensure you follow the specific requirements for reporting in your lease agreement. These include rules concerning the timeframe for reporting and the documents to provide. Note that dealerships and leasing companies also have specific repair procedures.

C. Government Authorities

If the accident involves bodily injury, death, or apparent property damage exceeding $500, you need to call 911 to report it to the police.

Common Mistakes to Avoid When You Total a Leased Car

Assuming insurance or gap coverage covers everything risks financial obligations. Also, not notifying the leasing company promptly or reviewing lease terms leads to fees. Hire a car accident lawyer for free to navigate the claims process.

How Do I Get Compensation After a Leased Vehicle Accident?

A car accident in a leased vehicle may result in personal injury and vehicle damage. You may wonder what you can do to get compensation. There are multiple avenues you may pursue, including:

No-Fault Compensation for a Leased Vehicle Accident

If you are driving a leased vehicle in Florida, you will have no-fault insurance. All drivers must have insurance and meet at least the state’s minimum requirements. So, the first place you should look for compensation for medical bills and lost wages is by contacting your insurance company. Demonstrating fault is not a requirement.

Third-Party Claim for Injuries

What happens if you have serious injuries? Florida law may allow you to bring a claim against the responsible party or parties who caused the accident when they were negligent. Victims with serious injuries may go outside the no-fault system and claim compensation for financial losses, plus pain and suffering.

Vehicle Damage for a Leased Vehicle Accident

Florida law requires all drivers to carry at least $10,000 in property damage liability per crash. Although this is a low amount, it is still coverage for vehicle repairs. The insured party may have also purchased additional coverage. If so, it can pay for vehicle repairs if the other party is at fault for the accident.

No-fault covers medical bills/PIP first, but total loss taps $10K property liability. If the other driver is uninsured/underinsured, pursue via policy or legal action for the vehicle’s actual cash value and towing costs.

Compensation Through Gap Coverage

The value of a leased vehicle not covered through insurance, which is totaled in a crash, may leave a remaining balance on the lease — that is a known problem. To counter this problem, there is gap insurance. 

Gap insurance is what it sounds like — it is meant to cover the difference between the balance of the vehicle’s value at the time of the accident and the amount the driver owes on the lease.

Related: Miami Hit-And-Run Accident Lawyers

Check to see if you have gap insurance. Often, as part of lease agreement requirements, there is a good chance you do.

Steps To Take if You Crash a Leased Car

If you are in a car accident and lease your vehicle, you’ll follow the same procedure as you would if you owned your vehicle. 

1. Call the police to file an accident report. However, never admit any fault, even partial fault, for the accident. 
2. Seek medical treatment for any injuries. Even if the injuries seem minor, you should still have them checked out, as they may be more serious than you realize.
3. Take pictures of the accident scene as evidence of the damages, if at all possible. 
4. Get the names and contact details of any witnesses.
5. Schedule a consultation with a Miami car accident injury attorney. It never hurts to get free legal advice and see if you have grounds to file an injury claim against the responsible party.

Dealing with Damages to Your Leased Vehicle

To ensure your leased vehicle is repaired or replaced, you should:

• Report the accident to your insurer and the leasing company.
• Determine if repairs can be made. Make sure the repair shop is accepted under your lease agreement if they can be made.
• If the vehicle is totaled, the insurance company should cover the vehicle’s value up to the policy limit. Gap insurance may cover the difference.
• You may pay the vehicle’s value and end the lease or roll the balance into another lease.

What if you disagree with the value of the vehicle?

If the damages in a crash are serious, the vehicle may be a total loss. The insurance company may pay you for the car’s fair market value. However, be sure to evaluate their assessment of that amount. It may be worth getting your own appraisal, especially if that value is much less than you expected.

After obtaining your appraisal, dispute the amount being offered by your insurance company by providing an authorized copy of the appraisal you had done. However, keep in mind your insurance company can only issue payment up to your coverage limits.

So, if you owe more on the vehicle than your coverage limits, getting an appraisal will not get you any additional money from your insurance company.

Would it not be easier to deal directly with the insurance company?

Many people mistakenly assume that settling their insurance claim with their insurance company or the other party’s insurance company is easier. However, you must remember that insurance companies are in business to make money, not pay out damages in accident claims.

Therefore, while they will certainly express concern and seem supportive, they will only reimburse you the least amount possible as required under the law. They will also use various tactics to attempt to get you to admit you were partially at fault, even when you were not.

They do this because they can reduce your settlement even further once you admit you were partially at fault for the accident.

Lastly, insurance companies will never tell you the maximum amount of damages you are entitled to receive. So, you can see why getting a free consultation with a car accident injury lawyer is better.

Leased Car Accident Injury Attorneys

Being involved in an accident with a leased vehicle can be confusing. In addition to being concerned about your well-being, you may be wondering how you will handle the situation, seeing that you don’t own the car. At Bernstein & Maryanoff Injury Attorneys, our specialized attorneys for car accidents handle claims involving leased vehicles every day.

We know the steps to take to make your claim a success. Our attorneys are aggressive, determined litigators. We use every avenue to reach the best possible result after an accident in a leased vehicle.

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