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  • avatar autobroker2 04/20/09 10:26 am PST

    Steve is right that you need to talk to your insurance company, but there are some more things going on here.

    First of all, when you sign a power of attorney (POA), that gives the insurance company the right, but not the obligation, to act on your behalf to transfer the title of the car. Have they already told you that they are going to total the car? If not, then they asked you to sign the POA in case they did, but they could still be evaluating the case. In that scenario, you still own the car, and you should find out what is happening to it.

    If they have told you that they are going to total the car, then you need to find out what they are allowing as a value for your car, and you do have the right to discuss that value. The issue is how much you owe on the car vs what they give you for it. If they are allowing less than the payoff on the loan, you are going to be obligated to make up the difference. (By the way, if you have GAP insurance, this is what it's for -- making up any difference.) The fact that the car is totaled (and the insurance company has taken ownership?) does NOT relieve you of the debt obligation.

    You should be aware that, technically speaking, the insurance company should not be able to pay off your loan without your written approval. That POA you signed probably does not extend to the loan on the car, just to transferring the title. There is a form you should be signing that says that you authorize them to pay off your loan. You should ask about that form, because the answer will tell you whether they are actually intending to pay off the loan.

    If the insurance company has totaled the car and is taking possession, you need to get a written statement to that effect from them to prove that you are no longer the owner. Do not just assume they have taken ownership.

    Also, if they are taking ownership, you should not cancel the insurance policy until you have it all in writing and get another car. It will probably be easier to get insurance for your next car if you already have a policy in place, especially since you just had an accident.

    Good luck!

Answers

  • Stever@Edmunds 04/19/09 5:41 pm PST

    Just curious, but where's the title?

    (You can reply by clicking the Answer this Question button).

  • sweetie26 04/19/09 5:53 pm PST

    The car was financed through capital one so thats who holds the title until its paid in full right? Since I have signed the rights over to the insurance company they have to pay capital one to get the title right? Which means I'm no longer resonsible for the car right?

  • Stever@Edmunds 04/19/09 6:07 pm PST

    I guess you should check with your insurance agent to be sure. Since you didn't have possession of the title, you couldn't sign it over to your insurance company. And there's a lien on the title so I guess Capital One isn't going to hand the title over without getting paid off either.

    I've never had a wreck bad enough to total a car (glad you're OK!) so I don't know the drill. I have heard that some states will always consider that you are the owner of your car until title is transfered (and maybe you need to fill out some other form saying that you are no longer liable for anything that happens while the car is being driven - probably not an issue if you totaled your car, but if it falls off a flatbed on the way to the crusher, will someone try to sue you since you're still the "owner")?

    If your agent doesn't know, call your DMV. And hopefully someone who does insurance will see your question and answer.

    Source: 

  • autobroker2 04/20/09 10:26 am PST

    Steve is right that you need to talk to your insurance company, but there are some more things going on here.

    First of all, when you sign a power of attorney (POA), that gives the insurance company the right, but not the obligation, to act on your behalf to transfer the title of the car. Have they already told you that they are going to total the car? If not, then they asked you to sign the POA in case they did, but they could still be evaluating the case. In that scenario, you still own the car, and you should find out what is happening to it.

    If they have told you that they are going to total the car, then you need to find out what they are allowing as a value for your car, and you do have the right to discuss that value. The issue is how much you owe on the car vs what they give you for it. If they are allowing less than the payoff on the loan, you are going to be obligated to make up the difference. (By the way, if you have GAP insurance, this is what it's for -- making up any difference.) The fact that the car is totaled (and the insurance company has taken ownership?) does NOT relieve you of the debt obligation.

    You should be aware that, technically speaking, the insurance company should not be able to pay off your loan without your written approval. That POA you signed probably does not extend to the loan on the car, just to transferring the title. There is a form you should be signing that says that you authorize them to pay off your loan. You should ask about that form, because the answer will tell you whether they are actually intending to pay off the loan.

    If the insurance company has totaled the car and is taking possession, you need to get a written statement to that effect from them to prove that you are no longer the owner. Do not just assume they have taken ownership.

    Also, if they are taking ownership, you should not cancel the insurance policy until you have it all in writing and get another car. It will probably be easier to get insurance for your next car if you already have a policy in place, especially since you just had an accident.

    Good luck!

  • ami4567 08/27/12 7:17 am PST

    Yes I also agree with Steve it is must to contact your insurance company about the insurance. If you don’t have possession on your first car you should ask to get insurance to your second car and be aware before signing any paper.

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