What Happens if a Leased Car Gets Totaled in a New York Car Accident?
Most people have a general understanding of how liability operates when they own their vehicle. The matter can become more complex when the vehicle is a lease. If you drive a leased car that gets totaled in a crash, what happens? Are you on the hook for the remainder of the payments? What compensation or insurance coverage can you seek? Continue reading for a discussion of what happens after an accident involving a leased vehicle in New York. If you were hurt in a traffic collision in New York, call a dedicated Bronx car accident attorney for advice and assistance.
Insurance Requirements for Leased Vehicles
If you drive a vehicle in New York State, you must maintain minimum insurance coverage. All vehicles must be insured, whether owned or leased. State law requires drivers to carry a minimum of $50,000 in personal injury protection (PIP) insurance coverage per person, which pays benefits regardless of who caused the accident. However, PIP does not cover property damage. Drivers must also carry at least $25,000 in liability insurance for injury to one person and at least $50,000 for the death of one person, with double those amounts per accident for multiple injured people.
For property damage, drivers in New York must carry at least $10,000 in liability coverage per accident. New York law does not require drivers to carry collision insurance or comprehensive insurance. However, most leasing companies require drivers to carry collision and comprehensive coverage. Collision and comprehensive coverage pay for vehicle damage if the driver causes an accident or if the vehicle is damaged by some other event, such as hail, fire, or theft.
Who Pays for a Totaled Car When It’s Leased?
If a leased vehicle is totaled in an accident, the leasing company will still expect to be paid. In fact, they’ll demand the remainder of the lease payments. If the other driver was at fault for the accident, and your accident falls outside of the no-fault insurance scheme, the at-fault driver (and their insurance) might be responsible to pay for the property damage. That means that the driver would be on the hook for the value of your vehicle, and the leasing company would collect what you owe from the property damages you win.
If you were at fault for the accident, your collision insurance would kick in and cover the remaining lease payments, up to the policy limit. If your collision insurance does not reach the value of the leased vehicle, however, you’ll need to look to other sources to pay the remainder. Moreover, the insurance policy may limit coverage to the fair market value of the vehicle, which may be less than the outstanding amounts still owed on the lease. Drivers who carry only the minimum amount of coverage are more likely to run into this issue. Drivers have the option of purchasing gap insurance when they lease a vehicle, which would kick in at this time.
Talk to your car accident attorney after your leased vehicle accident to explore your options. If the crash was caused by another driver, you might be able to seek compensation from that driver and avoid paying out of pocket for the value of your car.
Call a Dedicated Bronx Car Crash Injury Attorney Today
If you or someone you care about has been hurt in a New York traffic accident, find out if you’re entitled to money damages for your injuries by contacting the thorough and trial-ready New York car accident lawyers at the Bronx offices of the Kohn Law Firm for a free consultation at 718-409-1200.