I will start with the facts. Insurance 101
ALL auto policies have an EXCLUSION that it will (not) pay (ZERO) for an “intentional act”, in other words causing damages intentionally.
Your friend since he has a loan, then is required to have full coverage which is both collision and comprehensive to protect the lender till paid off. So, if in an accident/stolen etc, then insurance pays to fix or if totaled, then pays “fair market value” to the lender, then the policyholder would owe his/her deductible, then (if) there is (not) enough to pay the balance of the loan, then GAP takes over and pays this. But even in this scenario, not only the deductible, but would also owe the (2) months past due on the loan and interest.
Now since he is 2 months past due on his payments, then odds are they will repossess the vehicle. When they repossess the vehicle, then the lender can demand that he/she pay the balance in full, or if not, then they sell the vehicle at auction, which on average will get about ½ of the value, thus would owe the balance (not) collected from the auction. Then your friend would owe for the repo driver, the storage costs (while) waiting to be sold at auction. Either way, once it is repossessed, then if he/she would owe for the repo fees, storage fees etc which is costly.
But, there is always a chance that even if they wreck it and it is (not) totaled, then he/she will owe their deductible to have it fixed and the lender will demand it.
Also the biggest consequence, that depending on how this accident happens, then there is a chance of (serious) injuries or DEATH. That C-section will be nothing in comparison of the cost of (more) medical bills.
Whenever people get into financial straits, the 1st thing they think about is insurance getting them out, but that is the worst thing to do, since insurance companies have special investigators that “sniff” out fraud, thus once they run his/her credit record will see that he/she is behind on their payments, thus could end up paying (zero) thus back to square one.
With pregnancy have 9 months to plan, and yes a C-section cost about 3 times more plus a longer recuperation, but, sounds like with or w/out the pregnancy, that this person was over-extended and should not got into a $33,000 debt to start with. It looks like with 7 years to go, that he/she is paying roughly $400 per month just for the car payment and does not add the insurance costs?
So either have family (they love their new grandchild) help out with the past due vs doing something stupid. Try and have (both) grandparents help out (each) by paying ½ each to get it current. Or, just let the lender have it (don’t) have it repo to cut some of the costs. Either way, once the lender gets it back, will be stuck on the balance (no GAP) so best to figure to keep till you get it paid off.
retired auto adjuster