In the unfortunate event of a vehicular accident, the immediate concern is always the health and safety of the people involved. Once this has been addressed, the focus shifts to the state of the vehicle and the extent of the damage. This situation becomes even more complex when the car is still under financing with a finance house such as WesBank. However, if the vehicle is covered by comprehensive insurance, it provides some respite while dealing with the aftermath of the accident and the necessary steps that follow.
Understanding the processes involved following an accident is crucial to making informed decisions. These steps include recording the date, time, and location of the accident, noting the make, model, and license plate numbers of all vehicles involved, and collecting the personal details of all drivers involved. It’s also important to check for any witnesses, report the accident at a police station for insurance purposes, and contact your insurance company to advise them of the incident.
However, if the damage to the car is extensive, with repair costs exceeding the car’s value, or if the vehicle is deemed unsafe due to the accident, the insurer may decide to write off the car.
Lebogang Gaoaketse, Head of Marketing and Communication at WesBank, advises, “If your vehicle is financed and you are still paying it off when it is written off, you need to contact the financing company and inform them of the situation. Technically, the car is still the property of the financier until your insurance company settles the claim and pays the outstanding financing amount still owing on the vehicle.”
The insurance company is typically liable to pay the insured amount of the car minus the applicable excess. If there is outstanding finance, any payment will first be used to cover this amount. This could cover the exact amount or leave a shortfall, depending on the insured amount and the remaining balance on the vehicle.
The payout from the insurance company depends on your policy, the excess payment (the amount you have to pay upfront when you make a claim), the amount you still owe to the finance company if your car is being financed, and the depreciation value on your car due to wear and tear.
Once the insurance company has made the payment to the finance company, the written-off car becomes the property of the insurance company, regardless of whether there is an outstanding amount owed to the finance house.
Gaoaketse further comments, “If there is an outstanding amount owed by the customer to WesBank, this should be settled in full immediately. If the customer is not in a position to settle the account, we recommend that the customer enters into a payment arrangement with us, on terms agreed to by both parties depending on the customer’s affordability.”
Understanding the legalities under these circumstances is crucial. Being involved in a car accident is stressful, and the more you know about what to do after the accident and who to contact, the better off you will be when it comes to sorting out the car with your insurance company and settling any outstanding debt with the financing house.
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