Auto Insurance Claims: New Car Totaled in 24 hrs, minor bruises, asset protection attorney

Question
Hello -

My parents just bought a used lexus from a dealer and drove away that night.  The next day, they unfortunately totaled the car around noon.  Didn't even have the car for 24 hrs - luckily walked away with minor bruises.  The drove off the lot thinking they had the insurance taken care of on the new car as the dealer took their insurance card and processed something and returned it back to them.  Here it is the night after the accident and we are extremely concerned about the previous limited liability coverage prior to the purchase and the timing of the accident just prior to my parents calling to ensure the coverage of the vehicle thinking the had grace due to the checkup by the dealer.  So now there is no car with a 30 thousand dollar loan - are there any new car laws that give my parents grace so as to not be stuck with a 40 thousand dollar loan with nothing to show for it?  Their insurance carrier is Nationwide and they live in Virginia.

Answer
Generally speaking, when you ad a car or replace a car on an auto policy, whatever coverage was already in place on the existing vehicle is what will apply to the new vehicle.  If they did not have collision coverage before and they had not paid the additional premium to ad such coverage to the new car, then that coverage will not likely apply.

If your parents are unable to pay the lien holder what is owed, then the bank will likely pursue the dealership as it was their responsibility to verify collision coverage before letting the vehicle leave the lot. Either way, one or both parties will make every legal attempt to collect the money from your parents as they were the ones ultimately responsible for the vehicle and insuring it with the proper coverage.

I'm glad your parents are ok, but they may have quite a situation to deal with here.  If this is going to be a financially devistating loss for them, it may be time to seek the advice of an asset protection attorney.

Good luck.