Texas lein holders rights...3rd party ins claim

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PostPosted: Fri Feb 20, 2009 4:54 pm   Post subject: Texas lein holders rights...3rd party ins claim  

we are lein holders on an auto involved in accident...our customer not at fault...other parties ins (State Farm) paid the claim directly to our customer...she did not have repairs done...we now have possession of the car...but State Farm says they do not have to make the check payable to protect our interest due to a 3rd party claim...told me to fax thm a statue showing they have to protect lien holders interest....



loosing out in texas

winniechamberlain
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PostPosted: Fri Feb 20, 2009 7:01 pm   Post subject:   

They are 100% correct. They have no responsiblity to protect your interest in the vehicle. That is, they have no contract with your customer and their only responsiblity is inherited from their insured. You _do_ have a valid case against your customer but I'm betting the car was repo'ed so it will be difficult to collect. Still, if you are going to go against your customer for the amount owed on the vehicle, I'd certainly include the cost to repair the damage as well.



I completely understand your point of view... you _are_ getting screwed. But unfortunately your complaint can only be against your customer.



Note: Your customers own insurance company would be required to protect your interest but a 3rd party is not.

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PostPosted: Fri Feb 20, 2009 11:12 pm   Post subject:   

LOL. Silly lienholders. Insurance companies dont insure YOU we insure the policy-holder. Even if you are listed as additional insured on the policy. On the other hand, though, if said person has GAP coverage on their policy the payout for damages will be in the amount of the outstanding lien. But, they are not required to give you one dime of the settlement. It doesn't absolve their duty to repay their loan, of course. As a lien-holder you are NOT entitled to any damages arising from a claim.
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PostPosted: Sat Feb 21, 2009 1:30 am   Post subject:   

A lien holder is not listed as an additional insured on a policy... they are listed a a lien holder. In every state I know of, the insurance company _is_ required to protect any lien holder listed. So what you mentioned is not correct on 1st party claims (you do mention insuring the insured... so you are referring to 1st party claims). If this were a 1st party claim the insurance company _would_ be obligated to make sure the lien holder was compensated for the damage to the vehicle even if they have already issued payment to their insured.

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PostPosted: Sat Feb 21, 2009 4:03 am   Post subject:   

Quote:
the insurance company _is_ required to protect any lien holder listed




My LRA license is from TX and I am quite familiar with TX insurance laws. Lienholders ARE listed here as additional insureds and insurance companies have no responsbilities to lienholders. I see this thing everyday. I will not presume to be familiar with other state's insurance laws...



Quote:
In every state I know of




But I am familiar with TX.
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PostPosted: Sat Feb 21, 2009 9:34 am   Post subject:   

The Texas policy should contain a Loss Payee Endorsement. This would list the lienholder as the Loss Payee and require the insurance company to protect their interest when a payment was made. Pull the Loss Payee Endorsement on one of your policies and read it. What does it state? If the lienholder were an Additional Insurance under the policy they would have all the same coverage as an insured, which includes liability coverage, etc. I doubt the insurance company is going to provide this.

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PostPosted: Sat Feb 21, 2009 4:49 pm   Post subject:   

Quote:
we are lein holders on an auto involved in accident




What you are saying is that you hold a possessory lien on the vehicle? It is now in your possession and your contract of repairs states that you may place a lien on the proceeds from the insurer or from any other legal right?



Many states allow repairers to place a lien on the repairs known as a possessory lien. In some states, it is automatic if you possess and have the contract of repairs and complete authorization from the vehicles legal owner at the time the repairs began.



Better hope you had a good contract of repairs that the vehicle owner signed guaranteeing payment and agreeing to pay all legal and court costs to execute your contract of repair. It may have to be satisfied before the original lienholder can take repossession of it or an extended court battle could ensue as to your rights of possession. The rightful owner of the vehicle (now the loan company) has the legal right to take possession of it's collateral with the aid of a sheriff if you can show no proof of the right to possess.



My contract of repairs has a provision for this in part it states......



Quote:
If, as a result of a contract of insurance or some other legal right, Customer anticipates an insurer or other third party may be required to reimburse Customer for some or all of the payment for repairs, Customer agrees to assign the proceeds and/or benefits of that contract or right to Repair Facility, except in the event Customer's right(s) arises from a personal injury claim, and in such case, Customer agrees Repair Facility shall possess a lien on the proceeds and/or benefits of that contract or right to the fullest extent necessary to satisfy all amounts due and owing under this Contract of Repair. © Vehicle Information Services, 2006




Under the above language, nobody's getting the car til my contract is satisfied unless they want to lawyer up and contest the authenticity of my contract for repairs and the authorization. Showing the contract allows me to maintain possession and prevent the sheriff from taking.


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PostPosted: Sat Feb 21, 2009 5:52 pm   Post subject:   

Mike, the owner of the vehicle that was in an accident collected from the at fault parties carrier for the damage to the vehicle but never had the vehicle repaired (they just pocketed the money). The lien holder then reop'ed the vehicle with all the damage. So no contract exist for repairs or anything like that. Yes, the lien holders customer owes the lienholder for the damage but the car was reop'ed... the lien holder will have to go after this person for the amount on the lien as well as the damages to the vehicle. But the lien holder knows they probably won't see a dime from this person. The lien holder is upset that the at fault person's carrier was able to pay the customer and was not required to put the lien holders name on the check.



There is no repair company involved.

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PostPosted: Sat Feb 21, 2009 7:01 pm   Post subject:   

Quote:
we are lein holders on an auto involved in accident




makes more since, I read it as lien holders OF an auto. My mistake.


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PostPosted: Tue Jul 21, 2009 10:16 pm   Post subject: Sounds like SF owes you a check  

Texas Property Code

CHAPTER 61. MOTOR VEHICLE MORTGAGEE'S LIEN



§ 61.002. LIEN. A mortgagee has a lien on a cause of

action or other claim of a mortgagor in connection with an accident that involves a motor vehicle on which the mortgagee has perfected a lien and that is attributable to the negligence of another person.



§ 61.005. DISCHARGE OF LIEN. If the property to which a lien created under this chapter attaches is paid jointly to the mortgagee and the mortgagor, the lien is discharged.


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PostPosted: Tue Jul 21, 2009 11:06 pm   Post subject:   

Quote:
on which the mortgagee has perfected a lien
I get the impression that the claim was paid before the lien holder knew about the payment and/or they had not perfected the lien. That is, they had no placed he insured on notice of the lien prior to the payment (same requirement for 1st and 3rd party claims).
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PostPosted: Wed Jul 22, 2009 5:52 am   Post subject:   

If I am into an accident but never let my lien holder know about it, how would they go about then in perfecting the lien to get the claim check directed to them?



Am I obligated to inform my lien holder about accidents so that they can get their portion paid?


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PostPosted: Wed Jul 22, 2009 1:24 pm   Post subject:   

Quote:
If I am into an accident but never let my lien holder know about it, how would they go about then in perfecting the lien to get the claim check directed to them
When you buy a vehicle your lien holder puts your own carrier on notice of the lien right then and there. If you're filing with a 3rd party carrier, they won't have been put on notice ahead of time.

Quote:
Am I obligated to inform my lien holder about accidents so that they can get their portion paid?
You'd have to read your contract with the lien holder.



The only time this is going to matter is if you stop making payments to your lien holder. Otherwise they won't really care.
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PostPosted: Thu Jul 23, 2009 3:53 pm   Post subject:   

The 530A Loss Payable Clause (issued in Texas) is added by endorsement to the PAP when an insured lists a loss payee (aka lienholder) on an automobile insurance application. This is a separate endorsement than the Additional Insured endorsement, as they trigger different coverages.



The 530A Loss Payable Clause states "Loss or damage under Coverage for Damage to Your Auto shall be paid as interest may appear to you and the loss payee shown in the declarations or in this endorsement..."



In addition, the endorsement states the insurer will provide an advance notice of cancellation to the loss payee as they give to the insured.



Therefore, in 1st party claims where this endorsement has been attached, the insurer will pay the loss payee, as their interest applies to the vehicle.



In most cases, the lienholder will require proof they have been added to the policy as this is typically a provision included in the contract to purchase the vehicle. In the event the lienholder receives a cancellation notice, most lienholders will force place insurance on the loan to ensure their interests are protected.



The Additional Insured endorsement is used to trigger liability coverages. It is typically included when a vehicle is leased as the lessor is financially responsible for damages caused by the vehicle since they are still the titled owner.



On a side note - Texas hasn't issued nor renewed an LRA (Local Recording agent) license for many years. An agent's license in Texas is now referred to as a General Lines license and has been for some time.



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PostPosted: Fri Jun 03, 2011 9:56 am   Post subject: eURNBOMzWpQxJiNku  

Lien holder right.. Slap-up Smile


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