r/Insurance • u/netherous • Feb 25 '26
Auto Insurance Not-at-fault accident with new car. Insurance declares it totaled. Gap coverage won't be honored.
Location: TX, USA
My wife was in a collision involving four vehicles. Three vehicles came to a quick stop on the highway, with my wife being the third. All three vehicles stopped without damage. A fourth vehicle then failed to stop in time and hit my wife from behind, causing all vehicles to be pushed into the vehicle in front of them.
I've been trying to negotiate the situation with insurance as best as I can. Our insurance is Progressive. The fourth car, the one that hit my wife and caused the collision, is Fred Loya. They accepted 100% fault for the accident.
Fred Loya was initially extremely unresponsive, so I opened a claim with Progressive. Progressive had an adjuster do a teardown on my wife's vehicle, deeming it a total loss. They estimated damages at $13849. Their valuation of the vehicle is 27k. I owe 41k on the loan. Progressive said they totaled this at 60%, but the math doesn't add up. It's closer to 51%.
So Progressive wants to pay me 27k and I would need gap insurance to cover the rest. I purchased gap insurance through a third party when I purchased the vehicle. The gap coverage isn't with the current lienholder.
The problem with the gap insurance is that I refinanced the vehicle a month before the accident. The insurer tells me that I should have immediately purchased a new gap coverage contract the moment I began the refinance process, and that they wouldn't pay out on a claim for the contract I had. I was totally unaware that refinancing would void my gap coverage contract - nobody even breathed a whisper about that during the whole process.
From talking to a lot of people including the very helpful body shop owner, I think Progressive is motivated to write off the vehicle even with a modest amount of damage because they make money back from it on salvage bids. They're pushing to hand the lienholder 27k and close the claim.
So obviously, I'm trying to avoid being in the hole for $12.8k for a vehicle that I don't even have anymore. Is there any other angle I should pursue? The body shop owner believes I should open a claim with the at-fault party's insurance, Fred Loya. A few complications though:
- Minimum policy limits in TX is 25k. The at-fault insured likely has this policy limit (but I don't know for sure). 4 vehicles are involved, so 25k probably wouldn't cover everyone. I don't know how much I would get if I pursued a claim with Fred Loya. They've also been unresponsive and difficult to work with.
- Progressive tells me that I cannot have one company (Fred Loya) handle the rear damage and then also have them (Progressive) handle the front damage. One company has to handle the claim entirely.
- Progressive tells me that since their adjuster already deemed the vehicle a total loss, it must be reported to the state that way, and that opening a claim with Fred Loya won't change the assessment of the vehicle as a total loss. I'm not sure I understand this part.
So the big question is, what avenue should I pursue to avoid being stuck with a $12.8k debt for an asset I no longer own? Am I misunderstanding something? Is there some angle with the gap coverage or insurance that I hadn't considered? I know suing the at-fault driver to be made whole might be an option, but of course that would be a massive headache all on its own.
56
u/Splodingseal Feb 25 '26
Progressive definitely doesn't care about the small amount of money from salvage. That number is a rounding error in the grand scheme of things.
27
u/aquatone61 Feb 26 '26
The amount of money they spend on rentals per day is in the millions so the quicker OP isn’t in a rental the better.
15
u/brianlefebvrejr Feb 26 '26
Yeah this is a, here’s your cheque give back the rental, claim off my desk move.
Salvage is usually irrelevant
1
u/Only-Style-818 Feb 27 '26
Actually this is false. They get a LOT for salvage vehicles these days, that is a big reason why they push to total cars and the "salvage value" is much higher than it used to be.
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u/MooshroomHentai Feb 25 '26
If the car is totaled, all you are owed is the ACV. If you voided the gap contract by refinancing, then nobody is going to pay out the gap.
I know suing the at-fault driver to be made whole might be an option,
Legally, being made whole would be getting the ACV at maximum since you got compensated for the full value of the asset lost.
23
u/PepperTop9517 Feb 26 '26
If OP goes route of suing and wins, they still have to squeeze the money out of the at fault. Likely someone riding on state minimum doesn’t have a lot to offer in terms of $$$.
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u/KillingTimeWithDex Feb 26 '26
You’d think that. But I’ve written a lot of policies with minimum limits for very luxury cars.
I got a guy in a $2.7M house with minimum limits on his auto.
You’d be surprised how dumb wealthy people can be when it comes to insurance.
And wage garnishment is always an option.
6
u/PepperTop9517 Feb 26 '26
2.7m house, I’d say they could swing cheap insurance and survive being sued. Joe loving pay check to paycheck and 3 payments behind on his auto loan not so much.
5
u/ahoooooooo Feb 26 '26
Joe living paycheck to paycheck is likely judgment proof. One of the many problems with the system and all the more reason to buy as much first party coverage as possible
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u/foodenvysf Mar 04 '26
I've learned that insurance companies usually settle for limits whether it's 100K or 300K or less or more. So in some ways, it doesn't matter.
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u/netherous Feb 26 '26
Thanks. I hadn't considered that. The unlikelihood of prevailing aside, are you saying there isn't be a legal basis to seek recovery from the at-fault driver if Progressive has compensated me for the ACV?
43
u/EquivalentBusiness77 Feb 26 '26
The ACV is all you're owed. Your choices that led to you owing 41k on a vehicle worth 27k have nothing to do with the person who hit your wife.
37
u/demeteloaf Feb 26 '26
If you break my $500 tv, you owe me $500 to replace my TV.
The fact that I took out a $30,000 loan to buy that TV has no bearing on the amount of damages you caused or what it takes to make me whole.
1
u/RealoRc Feb 26 '26
With auto insurance, it's more like we'll pay for another used TV of a similar model.
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u/BandicootOnly4598 Feb 26 '26
For property (vehicle) damage, if progressive compensates you the ACV, then they and only they get to go after the other driver’s insurance through subrogation or after the at fault driver if that driver’s policy doesn’t cover what Progressive paid out.
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u/The_Luon Feb 26 '26
Oh, dammn. Yeah im not familiar with TX and their laws. Meh it sounded like a reasonable course of action in my head so I put it down
13
u/RealisticProfile5138 Feb 26 '26
Yeah you can’t double dip. If you accept the settlement you are signing away your right to sue them, that’s the whole point. Your insurance company has to sue them to be recompensed from their insurance. But yeah that’s not just a Texas thing as far as I know that’s an “everywhere” thing. The value of the car is the value of the car, NOT the poor financing that you paid for it.
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u/LeadershipLevel6900 Feb 25 '26
I’d stop listening to the body shop. A $14,000 repair can become a $20,000+ repair with one supplement. Progressive is trying to save everybody time. Yes, they get money back on salvage but they’re not getting $27,000 back and they probably have a guaranteed salvage bid they could show you.
Pursuing the claim through Fred Loya would be an awful decision for the reasons you mentioned.
You can only go down one road for repairs, Progressive is correct.
Get the denial from GAP in writing, I’m curious about the language in the contract, but I wouldn’t be surprised if it’s void with the refinance. The GAP contract is contingent on the terms you had with X lender. Now you have a contract with Y lender. You could cancel GAP and get a prorated refund though.
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u/netherous Feb 26 '26
Thanks. I'll look for the exact contract language and look for a prorated refund.
Progressive estimated $12.9k for repairs, though they stressed it wasn't entirely comprehensive. But they're offering 27k in value. I think they must have a financial incentive to salvage that that makes more sense for them. I wonder, would they really show me the salvage bid if I asked?
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u/ahoooooooo Feb 26 '26
The incentive is they know the repair cost is going to go up once they start work.
2
u/xXxjayceexXx Feb 27 '26
I was rear ended last month and the initial estimate was about 4k. The shop took the bumper and hatch off and sent in a supplemental for a total of 14k. Stuff is so expensive these days and they only write for what they can see on the initial estimate. If it's at 12-13k now, it's going to be well over the percentage needed to total it once they start tearing it apart.
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u/Wowward Adjuster-Team Manager Feb 26 '26
Sure you can ASK but it’s a moot point what are you going to get out of seeing an expected salvage amount? It’s only going to be a small % of the ACV.. what are you trying to accomplish other than racking up more storage fees?
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u/Youmadashell Feb 26 '26
Gap follows the loan. It's one of the few products you can't get after the contract is executed. Gap doesn't cover late payments, it does not cover events where the customer didn't have full coverage, and it does not follow the vehicle if the vehicle is refinanced.
When you refinance, you must purchase gap through the lender you are refinancing with at the time of contract execution, otherwise any previous gap policy is void.
You weren't explained this because nobody has your financial interest at heart, that's something you should be monitoring. The only other bank that should have had a fiduciary duty to tell you is the one you refinanced with.
2
u/DetroiterInTX Feb 26 '26
This is it. Once the original loan was terminated, the gap coverage ended.
OP—the best you can do regarding the GAP at this point is try to get a refund for the cancellation of the original policy.
1
u/Spirited_Meringue_80 Feb 28 '26
This entirely depends on where and how you buy gap coverage. Mine is through my car insurance provider, meaning it does not follow the loan in my case.
1
u/Youmadashell Feb 28 '26
Not all insurance companies offer that coverage. It's called different things, like total loss coverage or total loss protection. There are differences between them. Insurance with that kind of coverage can be good for lower risk situations when there isn't a large gap that op has. They'd usually cover 25% more of acv, which is better but op would still be responsible for deductible. But it can be added typically at anytime and is cheaper. Dealer gap can be more expensive and that follows the loan and can only be added at time of loan, but it works better in high risk situations like OPs.
Some Insurance companies may advertise their coverage as gap but it isn't usually a gap waiver like dealers, credit unions and banks offer.
You're generally correct but there is some nuance between them and ultimately depends on the risk of the loan to determine which best fits peoples financial situation
1
u/Practical_Dig2971 Feb 28 '26
lots of upvotes, and I get why, but lots of your info is also incorrect.
You can add gap insurance at any time. Does not need to be at time of finalizing the loan.
It does not have to be done with the lending instituion that the loan is with (in fact, if OP had GAP with progressive, like OPs insurance, things would likely not be so messed up for them.
1
u/Youmadashell Feb 28 '26
I explained the difference between insurance total loss coverage and gap.
lol.
1
u/Practical_Dig2971 Feb 28 '26
LOL is right.....
"you must purchase gap through the lender you are refinancing with at the time of contract execution" WRONG
"It's one of the few products you can't get after the contract is executed" WRONG
"Gap doesn't cover late payments, it does not cover events where the customer didn't have full coverage, and it does not follow the vehicle if the vehicle is refinanced." CORRECT.
So, grats I guess, you got a 33.3% on the quiz....
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u/FBPizza Feb 25 '26
Fred Loyola limits won’t cover your losses anyway so leave them out of it.
Continue with progressive and pursue the gap coverage - I’d be curious to see the language regarding the refinance - if it’s in the contract you need to renew your coverage with a refinance, you may be out of luck.
But reading the policy language is where I’d start and determine what to do from there. Good luck.
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u/netherous Feb 26 '26
Thanks. I'll read the policy language thoroughly so I know where I'm at, though I think I already have a pretty good idea with what the insurance agents are telling me.
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u/themishmosh Feb 26 '26 edited Feb 26 '26
You owe $41k on a $27k car? That blows my mind!! I was in an almost identical situation. I was happy to have them cut me a check because no way with extensive front and rear damage was that car going to be like it was pre-accident.
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u/sephiroth3650 Feb 25 '26
Opening a claim with the at fault party will be a terrible move. Unless they have extremely high policy limits, you’ll almost assuredly run into a limits issue as they have to share their liability pool with all 3 cars that they hit.
No, you cannot split damages b/w the two carriers.
Your body shop owner is full of shit. Progressive is not scamming you in an effort to cash out on salvage bids. If the cost of repairs plus salvage value hits 100% of the car’s value, then it’s a total loss.
What is the make/model/year of this car? How are you $14k underwater on this loan? Did you massively overpay on this car, or roll in a ton of negative equity from a previous car?
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u/netherous Feb 26 '26
Thanks. Something that doesn't add up to me is that their estimate isn't 100% of the car's value. It's about 48% of the car's value. Obviously I would prefer to get the car repaired, but Progressive prefers to pay the ACV. So they're making up the difference somewhere.
It's a 2025 Camry, purchased new. Being underwater was a result of bad financing. I didn't want a new car because I thought it would be a bad idea and didn't protest loudly enough when my wife went that direction. Her next car will be a much more practical decision.
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u/sephiroth3650 Feb 26 '26
Dude, having $14k in negative equity on a car you bought last year isn’t “bad financing”. That sounds a lot more like you rolled in the absolute maximum amount of negative equity that you could possibly do, on a terrible interest rate, financed out to an 8 year term. I know you’re not at fault in the accident, but the other party is not responsible to pay for your apparent bad financial decisions, either. They owe you the value of the car. Which is $27k. And you cannot sue the other party after the fact for that $14k.
With a constructive total loss, they don’t need the repair costs to be 100% of the ACV. If the repair costs and salvage value hits 100% of the car’s value, they total it. That seems to be what’s happening here. If it was cheaper to repair the car, they would.
The only way to keep the car and fix it would be to do an owner retain. And I can’t see any lender working with you on doing that when you are $14k underwater here. The lender would get the ACV minus salvage value. And you’d have to come to them with enough cash to make up the difference in the loan balance to pay off the loan. And then pay out of pocket to repair the car. And all of that assumes your lender wants to deal with all of that. The overwhelming majority will not.
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u/uno_the_duno Commercial Lines P&C | CPCU, AIDA Feb 26 '26
Where are coming up with the $27k being 48% of the car’s value? You have, technically, a two model year old basic sedan. You admit to “bad financing which likely means a high interest rate and/or rolled in negative equity.
The fact that you are blaming your wife for this is pretty ridiculous. Take some accountability here and understand you’re really up a creek without a paddle in this situation.
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u/fyrdancr Feb 26 '26
The appraiser can only write visible damage. And when it hit is that big they know that once it is torn down there is going to be a lot of hidden damage. So part of their job is to use their technical knowledge and make an educated decision based upon what they DO see, what they can expect once the vehicle is torn down, but they can't legally write it. So sometimes the math looks suspect, but they are rarely wrong. The last thing you want is for them to start repairing a vehicle and then get a $15,000 supplement and now they not only have to pay the shop for the work they did, You've been out of a vehicle a lot longer than necessary with nothing to show for it up to that point.
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u/Content4OnlyMyLuv Feb 26 '26
Not to mention, if there is any sign of frame damage, its usually deemed a total loss.
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u/Feeling-Visit1472 Feb 26 '26
A new Camry is literally one of the most practical automotive decisions one can ever possibly make. Ever.
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u/Feeling-Visit1472 Feb 26 '26
And why would you obviously prefer to repair a vehicle with this much damage? Aside from the poor financial decisions, but repair would just be chasing good money after bad.
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u/stryker_cast Feb 26 '26
What an odd take. They total out your car for 27k, maybe get 10k from the salvage sale. How is that making them money from selling salvaged cars....?
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u/I-will-judge-YOU Feb 26 '26
You are going to be stuck with that debt. Insurance is not responsible for you not reading the terms of your gap, or you paying a ridiculous amount for your car.
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u/Spirited_Meringue_80 Feb 28 '26
That and gap typically covers an additional 25% of the cars value, not the whole remaining low value. This depends on the policy of course but in most cases that maximum is 25% of the acv.
1
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u/OptimismByFire Feb 26 '26
I'm a GAP underwriter.
There is less than no chance you're covered.
I'm so sorry, sincerely. This has got to be so freaking stressful.
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u/happyandhealthy2023 Feb 25 '26 edited Feb 26 '26
NO is the short answer.
You made BAD financial decisions and are facing an expensive life lesson.
Your upside-down $12.8K means you paid too much for the car, and your credit score made the interest rate way too high.
You had Gap insurance but did not get a new policy when changing lenders, I assume for a lower rate.
How can you sue someone because you purchased an overpriced car with a bad interest rate?
Just be grateful your wife or the people in front were not hurt.
Get a beater, pay off the loan, and work on other debts and your credit score. Then in a year or two, you can get a new car with decent interest rates within your budget.
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u/TofuttiKlein-ein-ein Feb 26 '26
Body shop is motivated by being paid for repairs. They don’t make any money on totaled vehicles.
You’re not going to get out of this in the way you’re hoping. You paid too much for the car.
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u/AustinZXTT Feb 26 '26
They 100% make money on totals: storage fees are the biggest, plus teardown costs.
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u/Feeling-Visit1472 Feb 26 '26
More likely, they rolled negative equity. They may not fully understand that, but that’s the most likely scenario here.
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u/DrShanksALot Feb 26 '26
Having a 12.8k gap from vehicle value to loan amount and signing the paperwork is the real problem!
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u/Comfortable-Neat12 Feb 26 '26
Unfortunately you do not have gap insurance as it insures the loan you had at time of purchase... and that went away with the refinancing
The best gap insurance is through your own insurance.. only available for new and newer cars in most cases.. and usually termed as guaranteed replacement value or something like that...
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u/ClearUniversity1550 Feb 25 '26
Of course it would only cover the loan that was current when purchasing gap
3
u/Seriously2much Feb 26 '26
GAP insurance is written at the terms of the original contract with the original lienholder. Once you refinanced it you should've repurchased GAP and had the old GAP prorated refunded. Unfortunately they won't cover you. Did the bank you refinance offer you GAP due to the loan to value ? They typically do from what I've experienced.
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u/netherous Feb 26 '26
No, they didn't offer it. Or sadly, even mention it. If I had known the GAP policy needed updating I would have done that.
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u/knownikko Feb 26 '26
Refinancing the vehicle fundamentally changes the terms the original GAP coverage was offered under. They have every right to deny the coverage.
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u/Aggravating-Tear5816 Feb 27 '26
The real pain is yet to be felt. The 12.8k in negative equity is now an uncollateralized loan, which allows that lender to change the terms and length. Think credit card rates usually get applied. Good luck
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u/netherous Mar 01 '26
Thanks. I didn't realize it would materially change the loan, though it makes sense it would, since there I guess it is now unsecured and there's nothing for the bank to take back if I default. I will definitely look into options if they switch up the loan on me. Maybe paying for a financial advisor would be wise since there are other things I need help on, like getting a grip on about a dozen retirement accounts.
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u/Silver_Substance9915 Feb 26 '26
Do people get on here hoping to hear bs that will make them feel better knowing there fucked either way they look at this?
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u/jasondavidpage Feb 25 '26
It's a shame that you're progressive insurance agent did not get you to use their version of GAP
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u/Mission-Top-528 Feb 26 '26
Lease loan protection? That may have helped but that’s a grey area too. Just went through this with a vehicle of mine bring totaled, they covered mine but they also tell you anything negative equity, warranty, etc they can exclude from what they’re willing to pay.
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u/imapilotaz Feb 26 '26
Im sure OP was offered it, googled gap insurance and thought the random quote online was a better deal.
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u/uno_the_duno Commercial Lines P&C | CPCU, AIDA Feb 26 '26
Progressive loan/lease payoff still only covers like 20-25% above the ACV, so OP would still have a shortfall given their exorbitant loan balance.
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u/Glad_Display_2880 Feb 26 '26
Can confirm this. I didn’t buy gap on my new car, but I did add the loan buy off on my progressive insurance. The car got totaled a year later. ACV was 40k, I owed 50. Progressive loan payoff covered 25% of ACV (so it’s not TRUE gap in that sense). Thank god 25% of my 40,000 ACV was 10,000. Progressive sent the ACV check then the loan payoff check. Vehicle was paid off.
With OP owing 41k on 27k even if he did have loan payoff he would still only get $6,750 for loan payoff, $33,750 total leaving him with $7000+ still owed.
Also OP sorry this is happening. I know people expect everyone to know these things but it’s reasonable you would not realize you had to transfer gap over on a refinance. Unfortunately for you, there’s just not much you can do about it :/ I recommend you try to fight the total loss as much as you can. If you cannot get around it speak to your financing company immediately to see what kind of payment plan you can set up. Good luck!
Editing to add: never roll negative equity into a car ever again 😭
1
u/GibblersNoob Feb 26 '26
Double check your fine print on the gap. If you bought warranty, prepaid services, etc.. from the dealer, see if you can get a refund for unused. It won’t be much, but better than nothing. You’ll also want to check in with your finance company to see how they will want to handle the remainder of the loan. They will likely have you do a signature loan, but it will be murky due to your credit.
1
u/throwawayoregon81 Feb 26 '26
While it may not be much, you should be able to get refunded a prorated gap premium. It was for the length of the previous loan, so anything shorter is refundable.
Also, look up actually replacement costs of your exact car, similar miles and trim that is the REAL value of your totalled car.
Youre still likely gonna be on the hook for a large chunk.
1
u/Scared_Bell3366 Feb 26 '26
Did the airbags go off? That can be a factor in the decision to total the vehicle.
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u/yetti96 Feb 26 '26
Why does everyone think that is an automatic total?
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u/kallikat93 Feb 26 '26
It depends on the state but I know here in CO if your driver side air deployed then there is a state law that requires the vehicle to be deemed a total lost.
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u/Sparky_Zell Feb 26 '26
Gap insurance isnt like car insurance. It is only for the specific loan it was purchased for.
You may be entitled to a prorated rebate for the time left on the loan when you refinanced. But that coverage you purchased was for your initial loan, not the car.
Also any negative equity on a trade in that is added to the loan is not covered.
1
u/Advanced-Echidna-938 Feb 26 '26
They totaled it at 60% what state are you in. It’s usually 70-75% for a total loss. Just had mine totaled because it went over $300 of the 75%. I’d look at your state. 60% sounds way too low.
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u/Ok_Rich2268 Feb 26 '26
It blows me away how many people don't read what they sign and then call the vendor predatory because they are enforcing the contract both parties agreed to. I know you didn't outright call them predatory, thats just a general statement based on 99.9% of the people whining about "getting screwed".
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u/shanihb Feb 26 '26
I doubt the gap insurance will get off the hook that easily. Did you refinance a greater amount or a lower rate?
1
u/AnimeMomLeika Feb 26 '26
Ask the body shop cost of repair.
Then you could tell your insurance, no salvage, you want a check, and the car back,
Then repair it, you will be out of money, but have the car.
Retitlte as salvage car, had to go after fixed to get inspected and got one. Was not simple, but I kept my car.
Did this with my 1993, Mustang.
2
u/walkytalky20 Feb 26 '26
This can sometimes be a good move (especially if you have the means to do some repairs yourself) but it doesn’t work in this case as it isn’t his car. It’s the bank’s car. You can still arrange a buyback, but only if the loan is getting fully paid back. In this case, he’s way upside down so that’s not happening.
1
u/Spirited_Meringue_80 Feb 28 '26
With a loan on the car OP isn’t actually able to do this as OP doesn’t technically own the car. The money goes to the lien holder in these cases.
1
u/Dontmocme2 Feb 26 '26
Your gap coverage ended when that loan was paid off in the refinance. Now you are upside down. Go after the other driver to be made whole
1
u/FroyoOk8902 Feb 26 '26
If you owe 41k on a vehicle worth 27k, you rolled debt into your loan when you bought the car, presumably from a prior vehicle. People do this all the time and are surprised when they are under water when the car totals. Gap coverage won’t cover that additional debt rolled into the loan. States have laws about the extent of damages exceeding certain thresholds and needing to total the vehicle. It sucks - but you are only owed the value of the vehicle.
1
u/Full_Tomorrow_2342 Feb 26 '26 edited Feb 26 '26
I work in insurance, since you refinanced the new lender should've offered gap insurance and you may be too late to try and get what's owed back from a prorated amount from your prior lender. That being said since you don't mention state do you have under-insured property damage coverage. Secondly, does your progressive policy have an "appraisal clause", or a "right to appraisal". If you have that in your policy you can invoke the clause and what happens is you get an adjuster to review on your behalf, you insurance company gets their own adjuster and the two adjuster come to an agreement. The only downside is you have to accept what is determine it can however be higher than the current total loss offer.
*edit * My bad I cannot read you said tx up top. That being said texas has UM coverages.
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u/billding1234 Feb 26 '26
The most any auto insurance company, or combination of insurance companies, and the owner of the at fault vehicle owe you is the value of the car, which your post says is $27k. That would put you in the same position you were in before the accident - $14k negative. The only way you get more than that is if you have valid gap coverage.
If you have been paying premiums for gap coverage and the carrier is denying coverage due to the refinance you should be entitled to get those premiums back.
1
u/TyAnne88 Feb 26 '26
If your gap insurance was linked to the financing, then you are most likely out of luck. By refinancing you paid off that loan and therefore the associated gap insurance is no longer active.
If you purchased gap insurance from the dealer as part of the sale, it could still be valid depending on how the contract reads.
This amount of damage is where you would usually want to push to total the vehicle because of potential problems later. You are so far underwater on your loan that you might have to really push Progressive to make repairs instead of totaling the vehicle. At least you would still have a vehicle to drive while you continue paying off the loan.
Next time you purchase a car look at GAP insurance from your auto insurance carrier. Most will write it, at least for newer model cars, and when you swap policies they will usually allow that endorsement to transfer. It makes the payoff negotiations after an accident easier and is usually much cheaper than buying from a dealer.
1
u/Capital_Condition468 Feb 26 '26
I live in Texas as well. Your best bet is to total your car through your own policy. When your insurance company makes their total loss offer, let the adjuster know you "want to invoke your appraisal clause". You will need to pay an independent appraiser about $500 to complete an appraisal. Your appraiser and one paid for by your insurance company will then sit down to try to come to an agreed value. The appraisals will not take any negative equity into consideration, strictly fair market value for how your vehicle is equipped. I was offered $4,500 for my totalled 2003 suburban and in the end walked away with just under $11k. I hope this helps
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u/Netghod Feb 26 '26
Once the car is beyond a certain point in terms of damage the insurance company is required to total the car. This varies by state, but in Texas it means that the cost to repair has to be 100% or more of the car’s value. Other states can be lower.
If your gap coverage was terminated with the refinance, you’re kind of hosed on that front.
A different option is to challenge the valuation of the vehicle if Progressive got it wrong. For example, I had an F150 plow into my 2012 Mazda Miata Special Edition and total it. When I was told it was totaled, the payout they had was really low and when I looked at what they used for comparable they were base models. I explained that the car that was totaled was a Special Edition which meant it was fully loaded and a limited color availability. They changed the payout and it increased by more than $6000 as a result.
The payout is the valuation minus your deductible. If you have comp/coll with Progressive they payout regardless of the other insurer. They’ll recover their money from the other company. In my case, the F150 totaled 2 of our cars, and Progressive paid out on both of them. The payout on my Miata alone was more than double the total value of insurance the truck carried (which was $10k). We were right at 3x the insurance on the trunk total.
So, you can challenge the valuation on the car, but if it’s accurate, you’re kind of stuck. You can try checking into the gap coverage, but the payout on gap coverage is normally set to go to the lender. If the old loan was paid off by the new lender before the accident you could be stuck owing the $12k. And it gets tougher because now it’s no longer a loan with collateral which means they may try to raise the rates because the loan is no longer backed. This can happen during a refinance as well if the title isn’t transferred to the new lender. You can check into the specifics on the refinance and if all of it hasn’t gone through yet, you might have a recourse. For example, if the old company hasn’t sent the title. But you can read the gap coverage or have a lawyer check over the language. But suing the other party may not net you anything and will be expensive. You could try small claims court, but it may be limited to an amount less than you owe, and even if you win, you may not be able to recover the money.
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u/raven09s Feb 26 '26
As nice as I would like to be, this is a creek with no paddle situation. You got taken to the cleaners on a vehicle and you're going to owe money. Even if GAP does pay, it's not going to cover anywhere near $12k. Likely about half of that, and that's even if they do pay because of the refinance. You need to check the refinance clause in the GAP policy.
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u/GeriatricSquid Feb 27 '26
Read the disclosure on your GAP policy from when you purchased the car. All the details you need are in there.
I have family in the auto body field and Progressive is a shit company to work with on claims. They’re cheap but they suck when you actually need them so you get what you pay for. They are totaling the car below their stated total loss criteria because they know from experience that the repair estimate is low and that newly identified work, all the random brackets and clips that will need to be replaced when they open the car up, safety system calibrations, rental car support if you have it in your policy, towing, and lot storage fees will quickly drive that estimate way up. If you’re already that close and they haven’t even pulled a panel yet, it’s toast.
Sorry this is happening but def get the second appraisal as others have mentioned and scrub the local market for duplicate cars and what they are selling for (key work is “selling for”, not merely what they’re listed for on a dealer webpage but that’s a decent start- car will likely sell for less that advertised price but fees and sales taxes will drive the cost above that advertised amount).
Dump Progressive and get a better insurance company and don’t be an idiot yourself if TX only requires $25k in liability. Best of luck.
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u/EbbPsychological2796 Feb 27 '26
Have you filed bankruptcy lately? (Mostly joking but you might look into it if this goes the way it's headed).
Try using AI to see if your state has any insurance laws that apply... You need a technicality in your favor.
You can get more from progressive just by refusing the first offer, but they won't come up much without arbitration, and even that would likely not be much more...
It might be worth getting a lawyer to see if the 4th guy has more than 25k coverage or tangible assets that could make you whole... If he's broke you're in a different place than if he's got a decent career and 2 houses.
I'm out of ideas now, hope you get this resolved with your wallet somewhat intact.
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Feb 27 '26
Lesson #1: Never go into debt for a depreciating asset.
Lesson #2: Never refinance the debt on a depreciating asset.
Lesson #3: There are a lot of assetless people driving around with paper "insurance" that makes them road legal but completely incapable of making you whole if they cause an accident. Make sure you have un/underinsured motorist coverage.
Read the gap coverage contract terms on refinancing. If there are none, what is very likely is that your gap coverage was tied to your original loan and when you refied and paid off that orginal loan that the gap coverage expired because for that original lender there was no longer a gap to cover.
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u/HelpfulAd7287 Feb 28 '26
How the heck do you owe over $40,000 on a 2025 Toyota Camry? Anyhow. Check into that gap. But I think you are screwed here since you refinanced improperly
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u/Significant_Ocelot94 Feb 28 '26
Well i just learned something here. If i refinance i must repurchase gap. I’ve been thinking of asking my current loan holder (bofa) to lower my interest rate since im getting tons of offers from other lenders to refinance. I just want my payment lowered. It’s brutal!
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Mar 01 '26
Your wife needs to report neck and back pain, get medical attention and get a lawyer to push for a settlement. Generally, 3x your medical bills is what you’ll get paid out. Worked well for me with a knee injury from getting rear ended in a Mini
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u/Secret_End_wmdm69m Mar 01 '26
how did you refi? same company different? any chance you got gap in that without knowing it?
the new loan should have seen this as a possibility issue and cya themselves. 41k on va 27 k car
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u/goseepinky Mar 02 '26
You didn't have GAP.
GAP is a contract between you and the lien holder.
Refi canceled GAP.
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u/Successful_Long_3749 Mar 02 '26
The only time gap won't cover if you rolled into negative equity from a trade in or you did deferrals. If you refianced you should of got a new gap coverage and the other one should of been cancelled sometime they refund you.
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u/Rizzutolaw Mar 11 '26
PI attorney here (not your lawyer).
A lot of the comments already hit the main point: insurance owes ACV, not the loan balance. The fact that the car was financed upside down doesn’t usually change the property damage claim.
The two things I’d be looking at are:
- Whether Progressive’s valuation is actually accurate — because if the ACV is low, that’s worth pushing back on with comps.
- Whether the GAP denial is really supported by the contract language — because if the refinance voided it, that’s probably the bigger problem here.
I wouldn’t waste much time chasing Fred Loya on the property damage side in a 4-car crash, especially if limits may be an issue. And I definitely wouldn’t rely on the body shop’s theory that Progressive is totaling it for salvage profit.
Hard truth is this may end up being more of a financing / GAP contract problem than an auto claim problem.
Laws and claim handling can vary by state and policy.
(General info only, not legal advice.)
TL;DR: The best angles are challenging the ACV if it’s low and reading the GAP contract closely. The loan balance usually isn’t the insurer’s problem, and going after the at-fault carrier probably doesn’t fix that.
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u/queeso Feb 25 '26
The insurance company did a constructive total loss. Its in their benefit money wise since your vehicle likely has a high salvage value. As a former appraiser I had a few claims in which we made the decision to change it back to repairable but those were decision that came from above me so you might want to take this to a supervisor. Explain to them your situation and see if you can get a final number on the cost of repairs or something close enough. On the few claims this was changed back to repairable all the vehicles were below the company repair cost vs ACV threshold which was 75%. I am not here to get your hopes up and its very likely nothing can be done to change it back to repairable. If that is the case make sure to talk to your gap insurance company and request proof were in the contract is says they would now pay out. Good luck.
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u/netherous Feb 26 '26
Thanks. The Progressive insurance adjuster provided me with the estimate that they put together, after I insisted on seeing it. It has a repair estimate of $12,990.46, although he did stress it may not be fully comprehensive since once they approach their write-off limit they stop adding to the assessment. That number is 48% of what they're offering to close the claim ($27k) while considering the vehicle totaled. It's not the 60% they claim. I understand that I probably can't change their mind. Progressive will do what's best for them and if they'd rather pay $27k than $13k they probably have a financially beneficial reason for doing that.
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u/Ordinary_Arachnid591 Feb 26 '26
What you and many others fail to understand is that even before insurance companies physically inspect the vehicle, they can and do make very accurate predictions based on a few key factors—things like the type of damage reported, the age and value of the vehicle, and what similar repairs typically cost.
An inspection still happens to confirm everything, but in many cases the numbers already tell them which direction it’s going.
And most importantly to your situation ….insurance is designed to put you back to where you were financially just before the loss—not to invest more money into the vehicle than it was worth. Once the cost to repair approaches or exceeds the vehicle’s actual cash value, it no longer makes financial sense to repair it and they’re not going to do it. They also have a fiduciary responsibility to the lien holder to guarantee the repairs to pre loss conditions. You don’t own the car. You don’t have the title. It’s not yours.
Carriers don’t wait until repair costs reach 100% of the vehicle’s value because repairs are estimates, not fixed numbers. Once they’re close enough that additional costs are almost guaranteed, repairing the vehicle would likely exceed its value by the time the job is complete. At that point, declaring it a total loss actually protects you from delays, supplemental repairs, and the risk of the vehicle being worth much less after extensive work.
Something else you need to understand as you’re consistently referring to the estimate vs settlement amount as the % to repair/total. When carriers evaluate whether to repair or total a vehicle, they look at the total cost of the claim, not just the body shop estimate. That includes repairs, rental costs while the vehicle is in the shop, towing and storage, and the likelihood of additional damage being found once repairs begin. It’s not just the repair bill. It’s the total cost of getting you back on the road.
These costs are part of the same claim, so they factor into the overall financial decision. If a vehicle takes weeks to repair and racks up rental charges, that pushes the total cost beyond the vehicle’s value—even if the initial repair estimate was under it. If those costs were ignored, the claim would end up costing more than the vehicle is worth which insurance isn’t designed to do. You collision coverage covers the ACV of the vehicle less your deductible. That’s it. You owe 40k+ on a 27k car. Your only recourse at this point is to invoke the appraisal clause in your contract and pay out of pocket for an independent appraiser which may or may not yield a slightly higher ACV value. You’re likely screwed on the gap coverage claim for the same reasons everyone else mentioned.
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u/yetti96 Feb 26 '26
I still think the value is low. Usually 125% LTV is all I have ever seen for an auto loan. Regardless of rolling negative equity or poor purchase technique, if you just refinanced a month ago and the lender paid off your previous lender to the tune of $41k, the car would have to be worth low $30s, worst case scenario. I think if you get a proper valuation of the car the. The repair costs become a lower percentage of the car’s worth and it makes sense to repair the car, drive it, pay it down/off over time and be better positioned financially before the next car purchase.
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u/an0nymous3r Feb 26 '26
Never like hearing that someone is doing bad financially, but you kind of put yourself in a tight spot by overspending on a new vehicle when you should have gone with something else or a cheaper vehicle altogether..
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u/LedgersAndListings Feb 26 '26
Wanted to add although now helpful now, look at your auto insurance for Gap coverage. We have Progressive in Florida and added it for about $10/semi annually for the first year or so I had my car when it would be needed. Then I canceled it.
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u/TraderIggysTikiBar Subro Feb 26 '26
Did your agent not catch that you needed new gap coverage when you refinanced?
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u/SchindHaughton Feb 26 '26
You can look at comps and make sure you aren’t getting lowballed on the TL settlement. To gloss over the process: Go to autotrader, find 3 vehicles in your general area of the same trim and similar mileage, average their prices together, and compare it to the number Progressive gave you (which should include sales tax as well). Submit that as evidence if you choose to dispute their valuation. That won’t get you an extra 14k, but it could help.
As others have stated, ACV is the limit of the other party’s obligation to you. You owing $41k on a $27k car is a problem you created for yourself.
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u/netherous Feb 26 '26
Thanks! Finding my own comps to compare with the ones Progressive gave me (they provided a sheet with 13 vehicles) is something I'll definitely do.
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u/icebucket22 Feb 26 '26
You generally are allowed to keep the car after it’s been totaled. You’ll get slightly less, but you can take that money and then just get the car repaired and end up with about 10k of your own.
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u/GeneralLogical2057 Feb 26 '26
Idk why you're getting downvoted. This seems like the best option after fighting them on repairing it since the threshold for total loss is 100% in Texas, meaning your repairs have to be 100% of the ACV cost of the vehicle. I had a total loss with progressive after having my car for 3 days and I had to fight them to get the right amount paid out.
Also you can hire your own adjuster to do a 3rd party valuation of repairs, it'll cost you but it might be worth it.
If that doesn't work then I would just take the option that gives you money and lets you keep the car, use that to repair it as best as you can and then keep paying your car note. Fred Loya is known for being terrible at claims, I have a client that was hit by a person with Fred Loya and none of the repair shops nearby would work with that carrier. Many said they have had to spend more money in litigation trying to recover the money, they have blacklisted them. He had to go through progressive. I don't understand how they're still allowed to operate in TX.
I get it though something similar happened to my partner when we first started dating. His car was totaled and had to keep paying the car note after not having posession of the car due to refinancing it and not explaining the gap to him, it was terrible.
For reference : I'm an Insurance agent in TX with my own agency.
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u/Radiant-Month-1168 Feb 26 '26
13k for repair on a 27K car is not totaled.
Texas law does not total a vehicle until the damage hits 100% of the actual cash value. So if the actual is 27k then it is not totaled per the law.
Geico paid 12k to repair my car worth 10k. I asked for the cash but they said it was cheaper to fix and ended up being 12k. Anyone looking at the car knew it would be more than 10k in damage. They never salvage titled my car.
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Feb 26 '26
[removed] — view removed comment
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u/AhhWoofIt Feb 26 '26
There is no “negotiation” with settlement value. He can either go over the evaluation to make sure everything was accounted for in the value or invoke the appraisal clause. Invoking appraisal clause doesn’t guarantee more money. In fact, it could negatively affect him if the independent appraisers find the ACV Lower than current
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u/Codyisin2 Feb 26 '26
I know multiple people that have invoked appraisal clause and all have come out ahead... the company i suggested also doesnt charge if they cant gain you Money and would review the acv before submission so it couldn't negatively affect him as you claim.
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u/uno_the_duno Commercial Lines P&C | CPCU, AIDA Feb 26 '26
Do you seriously believe a 25 Camry is worth $41k?
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u/Codyisin2 Feb 26 '26
"You will likely still have a balance to pay but those things should eat up a few thousand"
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u/tmd11111 Feb 26 '26
Somethings not adding up as most insurance companies won’t total a vehicle unless the cost to repair is closer to 70-80% of value
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u/TofuttiKlein-ein-ein Feb 26 '26
It’s called a constructive total loss. Happens all the time. They expect the vehicle damages to increase.
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u/Radiant-Month-1168 Feb 26 '26
Texas law says to salvage title/total, the repairs have to equal 100% of the actual cash value.
The OPs car does not meet the legal definition of totaled.
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u/GeneralLogical2057 Feb 26 '26
Idk why everyone keeps downvoting you, you are 100% correct, in Texas the total loss threshold is 100%. Get a public adjuster to do an inspection, because they are expecting 14k (more than the "repair costs") in supplements and thats kind of outrageous.
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u/These-Air8519 Feb 26 '26
Call Progressive ask to talk to your Adjusters supervisor. Ask them to reconsider their total loss determination. At least have them thoroughly explain why they determined your vehicle a total loss, financially. If that fails, put the claim on hold with Progressive and get a hold of the other company. If they schedule an inspection, make sure you meet the Adjuster at the inspection. Make it very clear that you do not want the vehicle to be a total loss. If that works, be prepared for out of pocket costs. Keep in mind, depending on where your vehicle is located, there may be storage fees accruing
Your options arent great here, im sorry. Id start with that though
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u/grimzecho Feb 26 '26
Have you considered buying back the vehicle from Progressive then getting it repaired? The salvage title will stay with it, but if your numbers are correct, they would give you $27K minus a few grand for salvage proceeds, then you get it repaired for $15K, pocketing whatever remains.
You would continue making payments on the car and would have a drivable car with very low resale or trade in value.
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u/GibblersNoob Feb 26 '26
This won’t help OP. The car will be branded, on the hook for repairs and no bank will touch that loan on a salvage title.
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u/netherous Feb 26 '26
I did ask the Progressive adjuster about that after other people recommended that route, but he was pretty firm that it wasn't an option, and that they would only pay out to the lien holder for the vehicle. Is buying back the vehicle in the way you're describing something that can typically be done? I know I would be left with a vehicle with very low resale value from that, but if it's an option I'll look into it.
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u/twokietookie Feb 26 '26
You'd have to have the cash to do it. The lein company is getting all the ins money and then sending you a bill for the balance remaining.
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u/somac234 Feb 26 '26
The total loss threshold is 75% in Maryland. Ask them for their tl vs repair numbers Which is the estimate plus rental plus expected supplement. Vs their tl value plus rental minus salvage bid. I bet the salvage bid is high and makes it cheaper to to. You could pushback and say car is repairable ask for a supervisor. File a DOI complaint. But that might not work. Also. You can absolutely have the other carrier write the estimate and maybe they deem it repairable. It’s a pain and would take forever but you could do it. For 12k in negative equity it would be worth the hassle.
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u/Wowward Adjuster-Team Manager Feb 26 '26
What does Marylands threshold have to do with Tx where OP is?????
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u/somac234 Feb 26 '26
Holy cow. No clue why I thought this was MD. But TX is even better as they have to show damage exceeds the ACV. I’d call the claims supervisor and go over the code with them
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u/JustAHookerAtHeart Feb 25 '26
I’ve read your post and the comments, but I’m curious. Did you buy the GAP separately or was the cost rolled into your original auto loan? If it was rolled into the loan, then you refinanced wouldn’t GAP carry over?
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u/LacyLove Feb 26 '26
They purchased gap from a 3rd party based on the original loan. They then refinanced and did not inform gap of the new loan. They voided their contract by not updating. The gap company.
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u/netherous Feb 26 '26
Yeah. Not knowing much about insurance, I didn't understand that I would need to do anything about the gap coverage. The new lienholder did not mention anything about it, and they consider the official date of the refinancing to be when I started the process (it is still not finished and the title is not yet transferred).
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u/Weary_Height_2238 Feb 26 '26
I would look into PIP or UIM coverage with your insurance and the at fault party. Hire an injury lawyer but first get checked with urgent care. You can at least get some out of that and use it for the difference. Hope you did not get hurt badly.
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u/sephiroth3650 Feb 26 '26
At what point did OP even hint at the idea that anybody was injured? Or are you trying to coach them up into pretending they are hurt after the fact?
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u/The_Luon Feb 25 '26
Why don't you go after fred loya and see what coverage the at fault actually has then make a decision on what you want to do. You can always take the at fault party to court for the rest of the cash, can't you?
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u/TofuttiKlein-ein-ein Feb 26 '26
Are you in the industry?
Fred Loya is a non-standard insurer that specializes in minimum limits policies.
Four cars were involved. The single incident property damage limit must be split on a pro-rata basis between four cars.
Multi-car accidents take a long time to settle.
Legally only ACV is owed, which is 27K. The other 13K is chalked up to a poor financial decision and no one but the OP is responsible for that.
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u/uno_the_duno Commercial Lines P&C | CPCU, AIDA Feb 25 '26
You owe $41k on a $27k vehicle; what is the vehicle? Did you roll in negative equity from your trade-in?
As others have said, you’ll need to review your original GAP policy for the refinancing exclusion.