| Message |
Author |
|
 Posted: Fri May 08, 2009 5:35 pm Post subject: We are the lienholder. Our customers insurance policy cancel |
|
|
| Our customers insurance policy canceled one day before they were involved in a minor fender-bender. Our customers insurance company states policy canceled, no coverage. I disagree. The loss payee endorsement should protect us the lienholder for 10days...Am i wrong.. we are in FLORIDA! |
|
xfi_servicing
New member
Joined: 08 May 2009
Posts: 1
1.65 Dollars($)
|
|
| Posted: Fri May 08, 2009 8:15 pm Post subject: |
|
|
| I _think_ you are wrong. From what I remember... a long time ago... there is some type of grace period of 10 days. But this would be _prior_ the the time when the policy can be cancelled. That is, notification needs to go out giving 10 days and then the policy is cancelled. So once it's cancelled, there is no coverage. Also, the cancellation date is back dated at that point. |
|
tcope
Forum Expert
Joined: 22 Nov 2006
Posts: 5066
Location: Salt Lake City, UT
272.53 Dollars($)
|
|
| Posted: Sat May 09, 2009 2:27 am Post subject: |
|
|
The only sure-fire way of determining coverage for the lienholder is to look at the contract. There are definitely some policies that will extend coverage to a lienholder or mortgagee for a period of time after cancellation. This is normally allowed in order for the creditor to have a bit of time to contact their insured to resolve the issue and to possible place VSI (Vendor's Single Interest) coverage on the borrower. Keep in mind that not all contracts contain this language, but it's typically there.
Check the policy- it will have language that will clarify your question, and keep us in touch!
InsTeacher  |
|
InsTeacher
Moderator
Joined: 13 Aug 2007
Posts: 1331
Location: Oregon, USA
118.58 Dollars($)
|
|
| Posted: Sat May 09, 2009 5:41 am Post subject: |
|
|
| Quote: | | There are definitely some policies that will extend coverage to a lienholder or mortgagee for a period of time after cancellation. |
Why would they do so? I think the policy was cancelled for non-payment, then why the insurance company would cover the losses when they were not even paid. Won't they try to recover from the insured the loss that they have experienced on his behalf? |
|
kelvin
Senior member
Joined: 22 Nov 2005
Posts: 207
37.90 Dollars($)
|
|
| Posted: Sat May 09, 2009 11:33 am Post subject: |
|
|
| Quote: | | Our customers insurance company states policy canceled, no coverage. I disagree. The loss payee endorsement should protect us the lienholder for 10days...Am i wrong.. we are in FLORIDA! |
It depends...what does the loss payee endorsement say EXACTLY?
The one I'm looking at, (different state)...doesn't provide additional time, only addresses that Loss payee is protected in event of a claim (basically)
_________________
"Never, never be afraid to do what's right, especially if the well being of a person or animal is at stake. Society's punishments are small compared to the wounds we inflict on our soul when we look the other way." Martin Luther King Jr. |
|
Lori
Moderator
Joined: 10 Sep 2007
Posts: 8173
Location: Missouri
287.90 Dollars($)
|
|
| Posted: Sun May 10, 2009 5:46 pm Post subject: |
|
|
Did you (lienholder) receive notification of cancellation? I thought the lienholder had to receive a notice of cancellation as well as the policyholder. The lienholder can then force their own collateral coverage for their insurable interest.
Lori....any thoughts on this?? I am not sure... |
|
daystar
New member
Joined: 30 Jul 2008
Posts: 43
19.82 Dollars($)
|
|
| Posted: Mon May 11, 2009 4:26 am Post subject: |
|
|
Hi Daystar, nice that you have joined us back 
| Quote: | | I thought the lienholder had to receive a notice of cancellation as well as the policyholder. |
Can you throw some more light on this issue? I think the insurer might chose to inform the policy holder before cancelling the plan but they definitely aren't liable to do so. Its the responsibility of the policy holder to stay update. Does thing work differently when lienholder is involved? |
|
kelvin
Senior member
Joined: 22 Nov 2005
Posts: 207
37.90 Dollars($)
|
|
| Posted: Mon May 11, 2009 12:31 pm Post subject: |
|
|
Daystar says:
| Quote: | | I thought the lienholder had to receive a notice of cancellation as well as the policyholder. |
Did you come across any instances wherein it happened like that? Please share it with us in case you have seen a notice of cancellation being served to both of them.
| Quote: | | The lienholder can then force their own collateral coverage for their insurable interest. |
Does it usually happen that way? Or is their any alternative way of going about it?
Steven |
|
steven
Senior member
Joined: 02 Feb 2006
Posts: 1553
215.65 Dollars($)
|
|
| Posted: Mon May 11, 2009 3:34 pm Post subject: |
|
|
| Yup, I think in most cases the carrier needs to send a written notification to the lien holder (provided the carrier knows about them). As daystar mentions, this allows the LH to obtain their own policy on the vehicle to protect their interest. |
|
tcope
Forum Expert
Joined: 22 Nov 2006
Posts: 5066
Location: Salt Lake City, UT
272.53 Dollars($)
|
|
| Posted: Mon May 11, 2009 8:24 pm Post subject: |
|
|
Hey Kelvin,
It is nice to be back.
As Tcope also stated, in most cases the LH has to be notified. I have run across several occurrences such as this one and there is always a lot of question as to why the LH was not notified of the cancellation. I know for sure that if my auto coverage was cancelled GM would immediately force coverage until I could get a replacement policy. Same thing with homeowners. Were you listed as the lienholder when the policy was written? |
|
daystar
New member
Joined: 30 Jul 2008
Posts: 43
19.82 Dollars($)
|
|
| Posted: Tue May 12, 2009 3:29 am Post subject: |
|
|
Hey Daystar, thanks for responding to my queries buddy
| Quote: | | The lienholder can then force their own collateral coverage for their insurable interest. |
Is it same as the collateral protection insurance?
| Quote: | | As Tcope also stated, in most cases the LH has to be notified. |
Since the LH wasn’t informed in this particular case, do they have any recourse against the insurer now? Can the lienholder hold the insurer for negligence and demand compensation on the damaged collateral? |
|
kelvin
Senior member
Joined: 22 Nov 2005
Posts: 207
37.90 Dollars($)
|
|
| Posted: Tue May 12, 2009 3:35 am Post subject: |
|
|
| Quote: | | Since the LH wasn’t informed in this particular case, do they have any recourse against the insurer now? |
I don't see where the OP stated that the carrier did not send notification out. |
|
tcope
Forum Expert
Joined: 22 Nov 2006
Posts: 5066
Location: Salt Lake City, UT
272.53 Dollars($)
|
|
| Posted: Tue May 12, 2009 12:50 pm Post subject: |
|
|
Hi Daystar,
I'm waiting for your replies to my queries posted above..
Steven |
|
steven
Senior member
Joined: 02 Feb 2006
Posts: 1553
215.65 Dollars($)
|
|
| Posted: Wed May 13, 2009 4:26 am Post subject: |
|
|
Hi Kelvin and Steven,
Where I work this is referred to as collateral insurance protection. Be it a LH or a mortgage company, if the policy is cancelled, the LH can force their own very expensive coverage.
As InsTeach & Lori said, it depends on contractual language and loss payee endorsement. I have seen cases where the insured has brought me notification from the lienholder that coverage has been forced due to notification from the carrier that the personal auto policy has been cancelled (or non-renewed and no other coverage is in force). I have seen the section for loss payee left blank when there is in fact proof of a LH. Usually I will make the contact to the carrier & advise them that there is a LH and give them the contact information. They in turn contact the lender and once there is confirmed documentation that there is a LH the carrier usually settles with the LH for their insurable interest. So yes, the LH can demand payment. If the LH has forced coverage and the insured has proof of payment, we are able to fix that issue for the insured however it takes a very long time. Nine times out of ten, the insured receives the notification from the LH and they are very confused as they have been making their premium payments. It boils down to incorrect records being sent to the DMV insurance verification program.
I am getting off subject...sorry! Yes, I have handled issues such as this and with proper documentation, the LH is paid. I have had many Lienholders contact me (such as the one who started this thread) and if I can, I will try to intervene between the LH & company and resolve to the satisfaction of all. I believe there were two cases that went to court regarding this type of issue and I do not know the outcome as once it goes to court, I'm out of it.
So I've seen both sides....notification sent to the LH and notification not sent to the LH. It can get messy but with patience it usually is resolved.
Daystar
(Kelvin...what do you think buddy? ) |
|
daystar
New member
Joined: 30 Jul 2008
Posts: 43
19.82 Dollars($)
|
|
| Posted: Thu May 14, 2009 10:12 am Post subject: |
|
|
It seems that the borrower get into the accident right after getting his policy cancel. And it might happen that the lienholder didn’t get the time to enforce their coverage within this short period.
So, are they still eligible to receive coverage? |
|
simon
Senior member
Joined: 28 Sep 2005
Posts: 550
93.55 Dollars($)
|
|
