What happens if my car is totaled in an accident in Michigan?
Published:
March 4, 2026
Have you had a vehicle (owned or leased) totaled in a crash while covered under an auto insurance policy in the last 5 years? Did your insurance company cover the value of the car but not the sales tax and other fees? According to recent consumer allegations, insurance companies may not be reimbursing their policyholders for the full value of their total loss vehicle, resulting in financial hardships for owners and lessees.
Contact the lawyers at Shamis & Gentile, P.A. today to be a part of this class action lawsuit investigation.
Car accidents in Michigan
The Great Lakes State is home to almost 20% of America’s automobile production and is known as the birthplace of America’s motor industry. It is also home to over 300 000 motor vehicle crashes per year!
According to a 2019 study by Consumer Affairs, Michigan ranks in the top ten states of worst roads in the country. Respondents attributed Michigan’s poor road conditions to the use of salt to melt ice on the roads in winter. Respondents attributed the low ranking to potholes, poor road planning and seasonal disruptions.
Additionally, the state of Michigan uses the Percentage of FMV (Fair Market Value) to ascertain where a vehicle should be totaled or repaired:
Cost of RepairFair Market ValueResult$16 000$20 000 (80%)Vehicle totaled $12 000$20 000 (60%)Vehicle repaired
Michigan uses 75% or a ¾ loss ratio.
What happens if I wreck a leased car?
The popularity of leased vehicles is on the increase and it is important for consumers to understand what must be done if they are involved in a crash in their leased car.
Your first step is to make sure that you and anyone else involved in the crash are alright. If not, seek emergency medical care. You should immediately contact law enforcement to report it.
You must exchange contact and insurance details with the other drivers; take pictures of the crash site, vehicle damage and injuries.
What to do if you get into an accident with a leased vehicle
Gather documentation: Make sure your insurance company has the information you gathered at the scene of the crash as well as details of your lease.
Redirect payment: You will need to continue making payments until your claim has been settled.
Take final steps: Be aware of any shortfalls there may be and contact an experienced lawyer to help you get the payment you deserve. Check whether your insurance company will compensate you for only the value of the car. Especially when it comes to leased vehicles, insurance companies tend to underpay motorists whose vehicles were totaled by the exclusion of license, registration, or dealer fees as part of the car’s full payout value.
What happens to my lease or loan if my car is wrecked?
You will need to continue making payments on your lease until the insurance has settled. There may be a shortfall – particularly if you had opted for lower monthly payments and a large residual payment. You will also probably lose out if you initially paid a large sum.
Can I keep and repair my totaled car?
Yes, you can. You may want to salvage the vehicle yourself for the spare parts or you may want to have it repaired, but you need to ask yourself whether it is worthwhile from a financial and safety point of view.
What If I have a lease or auto loan?
Let’s say the current value of the vehicle is $5,000 but you still owe $7,000 to the leasing company. The leasing company expects you to pay the entire amount. You are still liable for this shortfall.
You need a lawyer to help you find a way to cover the costs. Contact the experienced lawyers at Shamis & Gentile, P.A. today to be a part of a class action lawsuit investigation.
