Auto Insurance Claims: Excess Mileage on Totaled Car, excessive mileage, excess mileage

Question
Recently my insurance company (GEICO) determined that my car was a total loss.  The residual value on my lease was $15,000.  I had racked up excess mileage on my lease.  I had "gap" coverage.  According to GEICO, the leasing company (GMAC)agreed to a settlement of $12,000.  GEICO paid $12,000 to GMAC and received the title in return.  According to GEICO, GMAC accepted the settlement. GEICO assured me on several occasions that I could "wash my hands" of any obligations that I had previously had to GMAC.  While payment from GEICO was pending, GMAC continued to dun me, even after I explained that everything was being handled by GEICO.  GEICO advised me to ignore GMAC's calls.  On two occasions I had conference calls w/ GEICO and GMAC but GMAC continued to dun me, saying that the car was not totaled, but repairable.  After finally acknowledging the total loss, GMAC applied the gap coverage to cover the outstanding lease payments BUT has billed me for excess mileage.  Is it common under the aforementioned circumstances for a leasing company to be entitled to a fee for excess mileage?

Answer
Hello,

You ask if this is common?  Every situation is unique.

I am not a lawyer and cannot give legal advice, however you did ask me my opinion as a court qualified expert on insurance claims.

It seems that you feel these fees are not fair and that you are just asking to understand.

OK. The gap covered the difference between the value of the vehicle and what you owed. That is why you were told you could just "Walk away."

The excessive mileage clause on the lease is a different animal. You signed a contract stating you would not put on any more than x amount of miles in x amount of time. In the event you did, you would be responsible for overage. This contract is a separate entity to the value of the car, even though if it had not had the mileage it did, it may have not been totalled.

Mileage as far as the totaling of the vehicle is considered giving the vehicle less worth. You did however enjoy those excessive miles and you did sign a contract stating you would take responsibility for the miles.


Bottom line--it appears as though you will have to pay this fee to GMAC and if you want to go further, I would sugggest speaking with a local attorney, but I think he will tell you the same thing.

Rob