What Happens in an Accident While Driving a Leased Car?
For drivers who don’t want to drive a vehicle into the ground, leasing is a popular option. Leased vehicles accounted for about 25% of all the vehicles driven in 2021. Leasing can lower your monthly payment and take away stress related to future repair costs and maintenance. However, the downside to leasing a vehicle is that after a car accident, you may be liable for additional expenses not covered by your insurance. Understanding your lease, your insurance options, and the steps you need to take may help avoid out-of-pocket costs if you are in a leased car accident.
What to Do After a Leased Vehicle Accident
Whether you own your vehicle, finance your vehicle, or you’re driving a lease, in an accident, you should follow the same steps. First, seek medical treatment for any injuries. Then, call the police to file an accident report, but never admit to any fault. If possible, take pictures of the accident scene to have evidence of the damages. Then, collect the names and contact information of witnesses.
Contact the Dealership or Lessor
Once you have spoken to the authorities, contact your dealership. You can usually speak to a representative in the finance department about the situation. Don’t repair your vehicle until you notify your leasing company or the dealership where you leased your vehicle. If you leased the vehicle through a bank or third party, you must also contact them. Let them know about the accident and send them a copy of the police report. They will also need to know the location of the vehicle if it was towed somewhere.
Contact the Insurance Company
Next, notify your insurance or the at-fault driver’s insurance company. Give the insurer your contact information as well as the date, time, and location of the accident.
If the damages are serious, the vehicle might be a total loss. The insurance company may pay you for the car’s fair market value. However, be sure to evaluate their assessment of that amount. It may be worth getting an independent appraisal done, especially if the insurance company’s valuation is much lower than you expected.
After obtaining your appraisal, you can dispute the amount offered by your insurance company by providing an authorized copy of the appraisal you had done. However, remember that your insurance company can only issue payments up to your coverage limits. If you owe more on the vehicle than your coverage limits, getting an appraisal will not get you any additional money from your insurance company.
Review Your Lease Terms
After an accident, the dealership has to worry about the vehicle’s condition, and the person who leased the car must worry about the status of the lease agreement. Leasing companies and dealerships may set specific conditions for dealing with vehicle damage. For example, they might require going to a specific service location for repairs or require you to report accidents to the leasing company. Failing to follow the terms of your lease contract could result in a serious financial penalty when it comes time to turn your car in.
Review the terms and conditions outlined in your lease contract to identify what you’re legally required to do after a leased car accident. Also, make sure the insurance company and leasing company are on the same page about repairs.
Who Pays for Repairs After a Car Accident in a Leased Car?
Texas is an at-fault state. “At-fault” means the person or party at fault for causing the crash is financially responsible for related bills, damage, and repairs.
For example, when you cause a car accident in a leased car, you are responsible for covering repairs with your car insurance policy. Insurance will likely pay for vehicle repairs even if you caused the crash.
When another driver damages or totals your leased vehicle, that driver’s car insurance is responsible for paying for repairs or the vehicle’s pre-crash value. If the other driver’s car insurance does not completely cover the necessary repairs, then you may use your insurance to supplement the benefits available, depending on your policy. You may also be eligible to file a personal injury lawsuit against the responsible party to cover your losses.
Depending on how long you have had your leased vehicle, the current value could be less than what you owe on your lease due to depreciation. Gap insurance covers the difference between the vehicle’s value at the time of the accident and the amount the driver owes on the lease. Most companies require more than the minimum insurance to lease a vehicle, eliminating the need for gap insurance. However, if your car has a high value, and your insurance limits wouldn’t cover the value, then getting gap insurance might be a good idea.
Alternatively, if you owe less than the amount received, a car dealership might roll the balance into a new vehicle lease.
Contact Hartley Law
You should work with an attorney to help you handle your leased car accident claim. Insurance companies rarely pay maximum damages after a leased car accident when a driver is not represented by an attorney. Austin Hartley is a car accident attorney who was awarded the 2021 Litigator of the Year Award by the American Institute of Trial Lawyers. Austin and the lawyers at Hartley Law are here to help you navigate your leased car accident claim. Contact us today to find out more about how we can help you.