Service center burned down...with my lease in it

I think one point that is not being discussed is the amount VW asked for to release the title of the vehicle to the insurance company. Their policy could easily be to ask for market value vs customer payoff amount (similar to how some third party lease sales are handled).

For my case, Honda FS sent State Farm a letter with a payoff amount which was the same amount for my payoff minus taxes. State Farm cut HFS a check for the payoff amount and then cut me a check for the difference which included sales tax and reasonable registration costs.

But if for any reason, HFS wanted to charge State Farm market value for payoff, I probably would have gotten just the sales tax or something like that


This is true (within reasonable limits, of course).

Except for it not being true.

Ummm your link says it’s possible, it also says you better get permission of the person being insured as well as demonstrating that there’s some kind of financial injury or they won’t issue it.
(aka Within limits)

Look at Lloyd’s of London, they insure the wackiest things. (David Lee Roth’s pregnancy insurance comes to mind)

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That’s a pretty narrow limit on who you can take an insurance policy out on. How many people’s death would really cause you financial hardship? Not many. And on top of that you need their consent to takeout the policy.

I don’t think that is consistent with saying “you can insure anything and anyone.”

Edit - your David Lee Roth comment. I’d concede you can insure just about anything. Just not anyone.

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Typically when you reach a certain level of unbelievability, you self-insurance and obtain re-insurance from someone like Lloyd’s of London. (source: The Circus naturally)

This post is another circular argument where the record seems to keep skipping over:

  • a signed lease where the proceeds of any overage in a total loss go to the captive, and
  • the fact that once the car is totaled, the title can’t be transferred until it’s branded, which means the insurance claim needs to be settled

Also on my Volvo in CA: VCFS is on the policy and insurance cards


This is a specific product, namely life insurance, which have very specific properties.

If you just want a bet on the person X being alive at a certain date, you can get this insurance at Loyds, for certain. This is not to say that you will find the premium agreeable.

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It actually says that or is implied? The last one I saw implied it.

The only lease I have seen that doesn’t explicitly state one way or the other is bmw


Typical ignorance & arrogance combo expected of all Kruger-Dunning club members… who never suspect that they belong to the club! For the record, I had a number of rodeos with various insurance companies - including some very complicated matters that took years to settle for very large sums in trial or mediation - and won them all. For myself and others.

The last time I had to use the “magic words” was earlier this year when my mother-in-law’s adjuster denied the claim under false pretenses. One quick call to a manager and the status changed from denied to paid in full. Just like that.

Gibson is a case law in CA. What you missed is that it deep dives into the extent of the insurer’s fiduciary duty, not the the indisputable fact that such duty exists for the paid coverage. Which explains the part that totally went over your head: UI portion in Gibson was outside the umbrella as it was not paid by the insured. Or did you already forget your own question from a couple of hours earlier?

Bottom line, I have no clue about NJ laws but there is no reason to discourage the OP from doing their own research on this.

PS: I really have to ask how do you suppose someone runs a Google search on things they don’t know to exist???


The fact is that VW now has to recognize income (which btw would have been a loss just a year ago).
Remember the IRS’s follow the money mantra? They have a windfall resulting from a third party’s casualty which is an unjust enrichment by definition.

I guess we might as well agree to disagree on this. I am only trying to help the OP… Thanks for keeping this respectful.

EDIT: meant would be loss if returned to VW last year.

What windfall is that?

They’re getting fair market replacement value for their asset they were renting.


So this thread definitely went in some very interesting directions, but I have one last update.

I could’ve bought the car…

I called VW Credit to complain. I had an extensive history with them and figured maybe they’d throw me a bone (made of money). I got someone in the Total Loss Department with some real advice.

People in this situation buy the car ALL THE TIME. You still have the right to buy it, albeit it’s destroyed. She gave me all the instructions and I’ll be making a separate thread with some good keywords in case this ever happens to someone again and are lost like I was.

Sadly, the check from Geico was already cashed by VW Credit and thus I missed my window. You live and you learn.

Thank you everyone!


There was no window. At least not one where you can legally insure a totaled car as if it’s not, and then expect an insurance payout for its full (non-totaled) value.

Out of curiosity, is there a reason you haven’t gone after the dealership’s insurance for the lost equity?

For that matter, why was your insurance involved at all? Shouldn’t the dealership’s insurance be the one that paid off vw credit?

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@max_g There was a window, the car was always insured by my insurance who was paying the value at time of destruction for the title (per my claims adjusted 22k). My insurance is obligated to send the check in exchange for the title which they then destroy. I could’ve obtained the title and received the value.

@mllcb42 My insurance is collecting the total amount from the insurer of the building. Problem was who gets the check, and it’s whoever has the title. VW Credit has the legal right to keep the amount of what the car was valued at while they technically owned it.

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It would seem that the check should go to the entity that was obligated to get the check at the lime the loss occurred, as that’s what it was insured for.

It also seems like you could still go after the dealership’s insurance for your lost claim. There are limits to the value that your insurance will pay out on the loss (market value to the owner usually), but their insurance should be responsible for making you whole.

The lost equity isn’t between you and your insurance or you and vw credit. It’s between you and the dealership.


This is for anyone who experiences the opposite of what GAP insurance covers: a total loss where the car was actually worth more than what was left to pay.

You can see what my situation was here: Service center burned down...with my lease in it - #65 by max_g

Tl;dr = My car had 23500 miles 1 month before it was due back, at a 36/36k term. The car had 14k as payoff, 300 for the last month, and turns out was valued at around 22k. The car was destroyed inside of a service center which burned down, and now I couldn’t get the at least 5k profit for flipping the car I planned on.

Lot of going back and forth with no one having answers, here it is: call your lease company and request a payoff amount and buy the car IMMEDIATELY.

After finally getting someone prudent on the other line at my leasing company, I found out this happens all the time. I requested the paperwork, but unfortunately was too late and my insurance had already sent the check and my lease company cashed it (I tried to get it cancelled, too late).

Once you do what your lease company requires, you’ll get a packet with the title how to go pay the DMV at your state the taxes with said packet. You don’t need the car. Apparently, this happens all the time and this is what people do. Once you have the title, your insurance has to send you the check and you have to send back the title which they then destroy.

Hopefully this helps someone thru this confusing and very particular situation I experienced. I know the most common situation is people are actually in negative equity so finding information was tough for me.

Also quick note: find out how much the taxes are. For me, VW Credit charged them (900 something) I believe due to state law, and even with my current 1k deductible I would’ve netted almost 6k.


Merged to avoid concurrent and redundant discussion on the same topic.

There are so many red flags here.

A. Don’t give advice on something you haven’t seen all the way through. There are pitfalls here with substantial risk. All you have is a theory and one with holes, to boot.

B. Don’t relay advice from some know-it-all working in the back office of a leasing company. I’m willing to bet he hasn’t actually done this himself. Whether or not people do it “all the time” doesn’t change the legality of it and risks involved.

C. Insurance, reg and title are state-specific. There 50 different possible state-specific scenarios here.

Depending on which state you live in:

The state could require a physical inspection for safety or emissions purposes.


The insurance company could require a physical inspection after you’ve acquired it and changed the policy to reflect ownership and no lien from a lessor. Like a CarCo inspection where they take 5 photos to send to the insurance company. These inspection requirements exist precisely to prevent people from acquiring totaled cars to collect the insurance payout.

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1 - Yeah, go after the dealer’s insurance for both lost equity and lost personal belongings (very tough to prove without photos or other convincing evidence).

2 - Normal subrogation process is next, happens all the time.

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