Answers to Personal Injury, Wrongful Death, and Car Accident Questions
Q: My car is a total loss and I owe more money on it than the value of the vehicle. Can I stay in my rental car until I am done treating for my injuries?
A: In most cases, no.
When you are involved in an auto accident in California, the insurance company for the at-fault driver is responsible for (1) paying for the repair of your vehicle or (2) paying for the fair market value of your car at the time of the accident. It is generally up to th insurance company to decide whether to repair or pay FMV. The owner of the car doesn't have much choice.
Because the insurance company only has an obligation to repair or pay, it is not responsible for paying for additional rental car expenses once it has paid for the car repair or to replace the vehicle. The insurance company is also not responsible for paying for the amount owed on the car loan. If there is any "gap" between what is owed and the fair market value of the car, the owner is responsible to pay that amount to the lender either personally or through gap insurance.
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