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What Does Fair Market Value Mean In A Car Accident?

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When someone is in an automobile accident in North Carolina or South Carolina and their vehicle is deemed a total loss, questions arise as to what the liability insurance company has to pay.  Common misconceptions are that the liability insurance company has to find and purchase you a new car, or pay off the loan of your totaled vehicle.  Neither one of these things are true.

The liability insurance company has to pay the fair market value of your vehicle, which can be simply explained as the price you could have sold the vehicle for right before the accident happened.  Because automobile loans are typically front loaded with interest, if your car has been recently purchased there is often a gap between the value of the car and the amount of your car loan.  The best way to protect yourself is to purchase “GAP” coverage when you buy your car, which will play off the difference between what the liability insurance company pays the bank or lien holder where you financed the car and the car loan itself.

 

The attorneys at Tippens& Zurosky have represented people involved in auto accidents in North Carolina and South Carolina for nearly twenty years.  Let us answer any of your questions regarding your automobile accident.  Call us toll free at (877) 372-3580, or 704-343-0018 to schedule a consultation so that we may assist you.