Ask a Lawyer - Archive

I was rear ended last month and my car was totaled. The at-fault driver's insurance company is only willing to pay a small portion of what I owe - is this fair?

I am sorry to hear about your loss. The at fault driver's insurance is only liable for the "Actual Cash Value" (ACV) of the totaled car. The ACV is calculated by determining how much it would cost to purchase a very similar vehicle in a very similar condition, plus taxes and other costs incident to obtaining title, etc. Very often, the ACV is much lower than what you paid for the car, and persons owing money on the vehicle are often left upside down, or owing more than the vehicle is worth. Thus, in most cases, purchasing GAP insurance when you buy a car is a good idea.