What Happens if You Total a Leased Car?

If you get into a car accident in Vancouver that totals your vehicle – meaning the cost of repairs exceeds the total value of the car – the claims process will be different depending on whether you own or lease the vehicle. If you total a leased car, you will need to work with the leasing company for guidance on what steps to take to file a claim. Different types of insurance may be available to cover your costs.

Minimum Insurance Requirements for a Leased Vehicle

Every state has unique automobile insurance laws. In Washington, the required minimum amounts of insurance for the typical motor vehicle driver are $10,000 in property damage liability, $25,000 in bodily injury liability per person, and $50,000 in bodily injury liability per accident.

Leased cars typically require full-coverage insurance policies with comprehensive or collision insurance. It is up to the leasing company what insurance to require. If you get involved in a car accident while in a leased vehicle, the insurance that you purchased will determine if your losses will be covered and by how much.

Notify the Leasing Company

After a crash in a leased car, call the leasing company to notify them of the accident. This is a requirement since the leasing company is the legal owner of the vehicle. Your car insurance company will not contact the leasing company on your behalf, in most cases. Provide any information the leasing company requests during the reporting process. You should make this report as soon as possible after the accident.

File an Insurance Claim

The other party you need to contact is your car insurance provider. Call your own insurance company first to notify them of the accident. You may have coverage that applies to the case, such as liability insurance or comprehensive coverage that was required by the leasing company. If the other driver is at fault for your accident, your car insurance company can communicate with the other driver’s insurer to resolve the claim and obtain coverage to replace the totaled vehicle.

Assess the Damage

After the crash, the leasing company will provide instructions for where to have the motor vehicle towed for a damage assessment. If the vehicle is declared a total loss by an auto shop, your insurance company will generally offer the actual cash value of the car at the time of the crash. Actual cash value depends on the condition of the vehicle and the current market value of vehicles in similar conditions. You may or may not have to pay a deductible on this insurance payout, depending on the policy.

Consider Gap Insurance

One distinct issue when dealing with a totaled leased car is the difference between the amount of coverage available on your policy and the remaining balance on your vehicle lease. You will still be responsible for making lease payments on the totaled car until the lease terms end. If you have gap insurance, this can pay for the difference between your insurance payout and the amount that remains on your leasing agreement. Without this type of insurance, you may be responsible for these costs out of pocket.

Fulfill End-of-Lease Obligations

Finally, work with your leasing company to complete the obligations and fees necessary to terminate your leasing agreement. Some companies may have specific requirements for returning a totaled motor vehicle after an accident. If you wish to engage in another leasing agreement with the same company for a different car, they can walk you through how to complete a new contract.

Contact an Attorney for Help

If you encounter problems obtaining a fair financial settlement for a leased car that was totaled, contact the car accident attorneys at NW Injury Law Center for a free legal consultation. These are complicated cases that may require assistance from an experienced lawyer.

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