Question

What if the other individual is driving a new Corvette worth $80,000, and you totaled it? How much is your insurance company going to pay? Are you responsible for the difference?

A) Yes
B) No
C) Partially
D) Uncertain

Answer 1

If you totaled a new Corvette worth $80,000 and have insurance, your insurance company will typically pay you the actual cash value of the car, which may not be the full amount. If the actual cash value is lower than the remaining balance on your car loan, you may be responsible for paying the difference, unless you have gap insurance.

Step-by-step explanation:

In the scenario where you totaled a new Corvette worth $80,000 and you have insurance, your insurance company will typically pay you the actual cash value of the car, which is based on factors such as the car's age, condition, and market value at the time of the accident. They will not likely reimburse you the full $80,000. If the car's actual cash value is determined to be $70,000, for example, your insurance company may pay you that amount.

Regarding the difference, if the actual cash value is lower than the remaining balance on your car loan, you may be responsible for paying the difference out of pocket. However, if you have gap insurance, it can cover the difference between the actual cash value and the remaining balance on your loan, preventing you from having to pay it yourself.

So, the answer to your question is C) Partially.