What if the lienholder is not included in insurance check?

Posted: Wed Jul 18, 2012 08:48 am Post Subject:

Well you've managed to screw up your life, haven't you?

Problem #1 -- You bought a vehicle that apparently wasn't worth the money you borrowed to buy it. Unfortunately, that's a loan you owe regardless of the condition of the vehicle. You could have had the vehicle inspected for a few bucks before you agreed to buy it, and then turned it down knowing the situation with the vehicle.

Problem #2 -- You used the insurance money for a purpose other than paying for the vehicle repairs or paying off the loan. You don't owe the money back to the insurance company, you owe it to the lender. In the meantime, enjoy driving to work in your new, financed vehicle. Hope you had it inspected before you agreed to buy it.

The problem between the lender and the insurance company (Problem #3) is not your problem, so don't worry about it. The insurance company fulfilled its contract by paying on the claim. That the money was divided between you and the lender is the lender's problem. The insurance company will deal with the lienholder and win.

The fact that you did not do with the money what you were contractually obligated to do ("I had to do what I had to do to take care of my own") is a legal matter between you and the lender, for which you have no defense. What you did was wrong, and you know it, even if you find a way in your own mind to rationalize what you chose to do.

So take your lumps by going to bankruptcy court (the sooner the better) and see what happens. You may at least sleep at night knowing that you don't owe anything to the insurance company.

Posted: Wed Jul 18, 2012 08:54 am Post Subject: Thanks

Well, even if you were kind of mean about it, I appreciate your response and it was helpful. So thank you. :)

Posted: Wed Jul 18, 2012 08:57 am Post Subject:

even if you were kind of mean

Posted: Wed Jul 18, 2012 09:07 am Post Subject:

One last thing, "well I've screwed up my life" is a bit of an unfair thing to say without knowing the circumstances. I got screwed bad in a divorce. I pay all my bills on time. I had a credit score of well over 700 before this mess of a man. I have never been on welfare or assistance of any kind and I work hard to keep it that way. I paid the leinholder on time, each and every month and I worked 70 hours a week for nearly year straight, to give him a huge down payment, which meant nothing in the end. As fate would have it, I hit a piece of metal in the road and it was no fault of my own and it unraveled everything I worked so hard to obtain. You call it justification if you will, but I work just as hard as the next guy and sometimes life throws you curve balls you simply can't handle. Anyway, thanks again for your reponse - even with the quips, I appreciate you taking the time out of your day to respond to me. Good day, may you always be prepared for the unexpected.

Posted: Wed Jul 18, 2012 01:36 pm Post Subject:

Please be advised, if the insurance carrier elects to pay the lienholder (creating a double payment on their end) they might seek recovery of that overpayment from you. Likewise, the lienholder might seek recovery from you. The interesting question is (for bankruptcy purposes), does the debt to the lienholder become unsecured by reason of the collateral being totalled. If you do not successfully discharge your debt in bankruptcy, You might be able to negotiate a lower payoff figure with whomever is established to be the creditor

Posted: Wed Jul 18, 2012 02:12 pm Post Subject:

The debt is secured by personal property, but that does not mean that the totaled vehicle (and the insurer's payments) extinguishes the debt. The OP is responsible to the lender for the full satisfaction of her contractual obligation. I don't believe the situation is altered by the insurance payments or the condition of the vehicle.

The OP sees it differently. This is not really her fault, but is a conspiracy against her created by her ex-husband. Before her involvement with him, her life was peachy keen. Great credit score, and all.

What she fails to acknowledge are the choices she has made. She chose the man she eventually divorced, she chose the car that needed $13,000 of repairs before she bought it, she chose to use the insurance payment intended to pay for repairs of her damaged vehicle as a down payment for another vehicle, and now she chooses to go to bankruptcy court to discharge her debts.

Those are her choices. No one is/has forced her to make those choices.

Women are not the only persons who work "70 hours" per week to make ends meet. Women are not the only ones who drive crappy cars, or pay their bills on time. The OP has a case of the "poor-mes" and is looking for sympathy.

Well, I sympathize with her, but that does not change the situation. We are all the sum total of the choices we have made. It has nothing to do with "fate."

She was not destined to run over a piece of metal that, somehow, caused the "total" destruction of her car, as farfetched as that sounds. That was an accident. Insurance pays for the damage done accidentally. She received the benefit of her insurance and now, for some reason, believes she is entitled to more than that.

Recall, also, that she wrote, "What the insurance company doesn't know is that I was told my a reputable shop (after purchasing the vehicle) there was 13k worth of repairs needed BEFORE the accident." It appears to me that the insurance company has made a payment (two individual payments) for damages it is not liable for, as the result of a false claim made by the OP.

In California, the concealment of material information allows the "injured party" (in this case, the insurance company) legal remedies, such as recission of a contract of insurance. It could also be ann example of fraudulent concealment or misrepresentation, which is a criminally prosecutable offense when an insurance claim is involved. A skillful prosecuting attorney could easily make the case that the defendant went looking for a convenient piece of metal to run over and make it appear as though it were an accident -- simply to collect insurance claim money to which she was not entitled. Hmmmmmmmm.

The OP could actually be committing insurance fraud by claiming that the "unseen damage" (of which she was aware prior to the loss) was caused by running over the piece of metal, and that could land her in state prison as a convicted felon. The choices we make. Fortunately, her anonymity here is a bit of a shield.

If she had not indicated her gender, guess what? My response and advice would have been exactly the same. You can look back through my posts and find similar answers to men who have asked essentially the same questions.

People expect their insurance to do what THEY want it to do instead of understanding what the insurance company has told them it would do. Sometimes the insurance company's interpretation of its contract is wrong compared to the words they use, and that's where I get involved these days. I work on behalf of the party who is getting the short end of the stick.

In this case, however, I have to side with the insurance company. They do not appear to have done anything wrong. The OP is at odds with her lienholder, which has nothing to do with her insurance. The insurance company may even be the victim of a fraudulent claim. In California, again, it has been estimated that as many as 48% of all auto insurance claims are fraudulent. Auto insurance fraud is the #1 type of fraud committed in California. Probably true in many other states, too.

And, according to the words she has written, it does not appear that the insurance company has made a "double payment" for the loss. She was paid for the amount of repairs the insurance company believed were necessary to restore her vehicle to working order. When it was determined that the damage exceeded the insurance company's liability, they paid the balance of their liability to the lienholder, as they should.

If they had made the initial $4000 check out to the OP and Lienholder jointly, the question here would have been slightly different. But the "poor me" part would have been the same.

Posted: Tue Aug 21, 2012 10:54 pm Post Subject: lein

My insurance comp. is sending a chk to my lein holder to pay off the mechanics lein will my leinholder give me back my car?

Posted: Tue Aug 21, 2012 11:56 pm Post Subject:

will my leinholder give me back my car

Posted: Sat Sep 29, 2012 09:52 pm Post Subject: third part insurance claim

I'm a third party in a insurances claim . I want them to send me the check only, not my finance company . I want to do the repairs myself . I have no contract with this insurance company . Can they still put my bank on the check ? If so why?

Posted: Sun Sep 30, 2012 12:08 am Post Subject:

Claim checks can be made to both the registered owner and the legal owner, since the legal owner (the lender) has a security interest in the property. This assures the lender that the repairs are made before the funds disappear.

You have to read your loan contract to see whether you can make the repairs yourself or not.

If your vehicle were declared a total loss, the insurance company would be correct to put only the lender's name on the check and leave it up to the lender to refund you any overage on the loan balance that might be created (in most cases, you would still owe the lender rather than be owed anything).