If the other driver caused the crash, can I pursue the driver directly for the remaining balance not covered by insurance? – North Carolina

Short Answer

Yes. In North Carolina, if the other driver caused the crash, a claim can be pursued against that driver personally for uncompensated damages, even if the insurance company only pays up to policy limits or disputes value.

However, the “remaining loan balance” on a totaled vehicle is not automatically recoverable just because it is still owed. The recoverable amount is usually tied to the vehicle’s value (and related losses like loss of use), not the payoff amount on the loan.

Understanding the Problem

When a North Carolina driver is at fault in a crash and the other vehicle is treated as a total loss, a common question is whether a lawsuit can be brought against the at-fault driver directly for the gap between the insurance payout and the remaining vehicle loan balance. The decision point is whether the law allows recovery of that “gap” as damages, or whether the claim is limited to the vehicle’s legally recognized value and related losses, regardless of what is still owed to a lender.

Apply the Law

North Carolina generally allows an injured party to pursue the at-fault driver for damages caused by negligence. Insurance is a source of payment, but it does not replace the at-fault driver’s legal responsibility. That said, the amount that can be recovered for a totaled vehicle is typically based on the vehicle’s fair market value (and sometimes loss of use and certain related expenses), not the amount remaining on a loan.

Key Requirements

Fault (negligence): The other driver must have caused the crash by failing to use reasonable care (for example, following too closely or failing to yield).
Legally recoverable damages: The claim must be for losses the law recognizes (commonly the vehicle’s value and related losses), not simply a financial shortfall created by a loan payoff.
Ability to collect: Even with a valid claim, recovery beyond insurance often depends on whether the at-fault driver has assets or income that can satisfy a judgment.

What the Statutes Say

N.C. Gen. Stat. § 20-279.21 (Motor vehicle liability policy; minimum limits and required coverages) – Sets required liability coverage limits and explains required uninsured/underinsured motorist coverages that may apply when the at-fault driver’s coverage is limited.
N.C. Gen. Stat. § 1-540.2 (Property damage settlements from crashes) – Clarifies that settling a property damage claim does not automatically settle other claims unless the written settlement says so.

Analysis

Apply the Rule to the Facts: Here, the other driver appears to be at fault and the insurer is treating the truck as likely totaled. A claim can be pursued against the driver directly if the insurance payout does not fully cover legally recoverable damages. The key issue is that the remaining loan balance is not the same thing as the truck’s fair market value, so the “gap” may not be recoverable unless it matches a recognized category of damages.

Process & Timing

Who files: The vehicle owner (and sometimes the lienholder may need to be addressed because the lender is paid from total-loss proceeds). Where: Typically North Carolina District Court (smaller cases) or Superior Court (larger cases) in the county where the defendant lives or where the crash occurred. What: A civil complaint alleging negligence and itemizing property damages (and any injury damages, if later supported). When: Usually within the statute of limitations that applies to the type of claim; deadlines can be strict and fact-specific.
Before filing, the claim is often documented and presented to the liability insurer with proof of value (comparable vehicles, condition, options, mileage) and proof of related losses (towing, storage, reasonable rental/loss-of-use documentation). If the insurer tenders policy limits or denies part of the claim, the remaining claim may be pursued against the driver.
If a lawsuit is filed, the case proceeds through service of process, discovery, and either settlement or trial. If a judgment is obtained, collection may require additional steps (and may be limited by the defendant’s ability to pay).

Exceptions & Pitfalls

Loan payoff is not the damage measure: Being “upside down” on a vehicle loan is common, but the at-fault driver typically owes the value of what was damaged, not what is owed to a lender. This is why gap coverage (if purchased) can matter.
Signing the wrong release: Some insurance paperwork can be written as a full and final settlement. Under North Carolina law, the written terms control, so releases should be reviewed carefully before signing.
Collection reality: Suing the driver directly can result in a judgment, but collecting beyond insurance can be difficult if the driver has limited assets or income.
Value disputes: Total-loss cases often turn on documentation of condition and comparable values. Poor documentation can lead to a lower offer and a weaker case.

For related issues that often come up in the same situation, see guidance on a fair total-loss value and whether rental or replacement transportation costs may be recoverable.

Conclusion

In North Carolina, a claim can be pursued against an at-fault driver directly when insurance does not fully pay legally recoverable damages. But the remaining balance on a vehicle loan is not automatically recoverable; the claim usually centers on the vehicle’s fair market value and related losses, not the payoff amount. The practical next step is to document the truck’s pre-crash value and losses and, if the insurer will not pay them, file a negligence claim in the proper North Carolina court before the statute of limitations expires.

Talk to a Real Estate Attorney

If you’re dealing with a total-loss offer that may leave an unpaid vehicle loan balance, our firm has experienced attorneys who can help explain options, paperwork risks, and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.