What to Do After an Unexpected Accident

Getting involved in a road accident is always a stressful experience. But if you’ve totaled or otherwise seriously damaged your car while still paying off its loan, it can be even more difficult to navigate.

Your safety and the safety of your passengers should always be the main priority in the event of an accident. However, dealing with the damage to your vehicle should also be a top priority. If your car loan is not yet paid off, the repayment and insurance claims processes can change.

Unfortunately, seriously damaging a car that is currently being paid off can result in extra fees. Not only will you still be left with the terms of your car loan, but you may incur additional expenses by owing more to your loan than the car is worth.

However, there are some ways to handle this tricky situation that mitigate additional costs and help you manage the paperwork more efficiently.

What To Do After Your Not-Yet Paid-Off Car Is Written Off

Accidents happen. In fact, when it comes to road accidents, this is an understatement. The US police receive a mind-boggling 6 million accident reports a year. Of those 6 million accidents, around 40,000 are fatal. The rest account for anything from minor to major collisions that happen roadside or on the road.

If you’re fortunate enough to have survived a car accident, you know how stressful and taxing it can be on both your mental and physical well-being. Working through insurance claims is likely the last thing you want to do in that state, but it must be done, especially if you have a car loan.

Cars that are written off on the road but not paid off yet financially still need to be paid off, even though the damages incurred may have rendered them undrivable. Here’s what you should do in this frustrating situation:

Document the details of the accident

The first thing to do in the event of a car accident is to ensure the safety of you, your passengers, and any involved pedestrians. The next step is to record the details pertinent to the accident for insurance purposes.

Write down the time, location, and date of the accident and any other relevant details that could impact how your insurance company handles it.

Take down the license plates and contact information of any other drivers involved, and find out if there are any witnesses who can attest to what happened. If there are, getting their contact details as well can be helpful later on. The more information you have, the easier it’ll be for your insurance company.

Take photos of the accident as evidence

Another important thing to do to support your insurance claim is to photograph the accident. Take pictures of the scene, any other vehicles or objects involved, and the condition of your car, focusing on the key aspects of the damage. This will help your insurance company identify how much will be needed to cover the repair fees.

These photographs may also be used if there are any legal issues and can be crucial evidence if a car accident lawyer has to argue your case in court.

File a crash report

If a law enforcement officer did not attend the scene of the accident, you’ll need to report your accident to the nearest police station so that you can get a crash report for insurance purposes. Different states also have varying time limits for reporting an accident, so ensure you fall within the legal time period.

Once you have a crash report, you can officially submit the details of your accident to the insurance company. Only then will you be able to start the process of repaying your loan in an accident-adjusted way.

Contact your insurance company

Once you have gathered all the details and pictures of your accident, as well as a crash report, you can contact your insurance company and submit it as a report.

Every insurance company has a unique process for dealing with crash reports, especially in the event that the car involved is not yet fully paid off. Ask your provider what the process is going to look like going forward and how you can assist to make it as smooth, efficient, and low-cost as possible.

If your car is simply a bit damaged and the repairs are manageable, it is likely that your loan rates and repayment structure may be extended or increased to a larger sum.

Depending on your insurance company and the nature of the damage to your car, insurance may cover a good portion of the repairs. However, the bottom line is that if your car is totaled, you will still need to pay off your car loan regardless. Your loan agreement is with the bank or a lender, and they need to recoup their loss, regardless of what happens with the vehicle itself.

Understand that your car is still the property of the financier

The most important point to understand about crashing a car that has not been fully paid off yet is that whoever financed the vehicle initially is still the owner of it.

Therefore, you are still responsible for paying the loan back. The amount you owe may vary depending on how bad the damage is and how long your loan repayment structure was originally intended to last.

Whether your car is totaled or not, the financier (whether that is your bank or a private lender) will still require you to take financial responsibility for the outstanding amount due on the car.

However, if you have a good insurance package, the company should cover most of the repair fees. You can simply wait until your car is repaired and ready to drive again and then get on with your life.

Deal with the situation immediately

Regardless of what kind of car accident you’ve had, the best approach is always to be as proactive as possible. The sooner you submit a crash report, the sooner your insurance can assess the damage and hopefully swoop in to help you cover those repair fees. It is in your best interest to handle the paperwork quickly and efficiently.

Conclusion

Being aware of the legalities surrounding a car accident is important for anyone currently paying off a car loan. Navigating this situation from an insurance perspective can be confusing and expensive, but the more information you have, the more affordable and simple it will be.