Car Accident Claims Involving Leased Vehicles
Posted on behalf of Phillips Law Group on Aug 25, 2020 in Auto Accidents
Do you know how to seek compensation after an accident in your leased vehicle? Is the process different? If so, how?
Below, learn more about crash claims involving vehicles that are leased and not financed or owned by the driver. If you have questions, you can always contact Phillips Law Group to discuss the situation. The initial consultation with our experienced Phoenix car accident attorneys is 100 percent free of charge and there is no obligation for you to take legal action.
We have recovered hundreds of millions in compensation for our clients, including many car crash victims.
How Leases Work
While many people finance their vehicles with loans, some choose to lease their vehicles. A lease is essentially a rental – you make monthly payments to use the car for a certain period specified in the lease.
Usually, when the lease term ends, you must return the vehicle to the leasing company. However, some leasing agreements give you the option of buying the vehicle at the end of the lease.
What Happens After an Accident in a Leased Vehicle?
Your first step after any accident, leased vehicle or not, is addressing your injuries. Calling the police is also important, as they can write an accident report and issue traffic citations if traffic laws were broken before the crash.
Your insurance company and the leasing company will likely require you to notify them about the accident. Contracts with these companies often say you must notify them of an accident within a few days, otherwise you may lose the right to pursue compensation for medical bills and damage to the vehicle.
Addressing Your Injuries
As with other claims, victims generally must pay up front for their medical care and be reimbursed later via an insurance settlement or courtroom verdict. However, if you have health insurance, it may cover your medical costs – the insurer will likely require reimbursement once you receive a settlement.
Prompt medical care and continuing treatment are critical to the success of your claim. It is important to take steps to show the severity of your injuries and link them to the crash.
Repairing the Car
The body shop you take the vehicle to will estimate what it would cost to fix your vehicle. The insurance company will review that estimate to decide how much compensation it will provide you to fix your vehicle, minus your deductible. The deductible is the amount of money you must pay before the insurance policy kicks in.
If the insurance company will pay $4,000 to repair your vehicle, but you have a $1,000 deductible, the insurance company will provide a total of $3,000.
You may be able to pick the repair shop that works on your car, however, the lease agreement may specify where you can take the car and what parts can be used.
The insurance company will only provide compensation up to the limits of your policy. If the cost of repairing your vehicle exceeds the insurance limit, the insurance company will only provide the policy limit, minus your deductible.
I Totaled the Car. What Happens Now?
Typically, the leasing company will pay you for the current value of the vehicle. If you still owe money on the lease, you must pay it. That means next month’s payment is still due.
Usually an insurance company declares a vehicle a total loss if the cost to repair it is at least 65 percent of the value of the vehicle.
If you owe $10,000 to the leasing company, and the insurance company pays you $8,000 for the vehicle, you will still owe the leasing company $2,000.
Gap insurance is usually not very expensive. It pays the difference between what the insurance company paid for your vehicle and what you owe on the lease. Leasing companies often require this insurance.
Were You Injured in a Leased Vehicle Crash?
Phillips Law Group welcomes a chance to discuss your accident and determine how we may be able to assist you. We have helped many crash victims over more than 28 years serving the injured in Arizona. We understand how devastating car crashes can be and are committed to pursuing full compensation for our clients.
The initial consultation is free, and we charge no upfront fees for representing you. That means there is no risk in contacting us.
Need Legal Help? Call Phillips Law Group: 1-800-706-3000