by Debi » Wed Apr 15, 2009 12:03 am
I hold a recorded judgement lien on real property that was recently deemed a total loss due to fire. The insured didn't declare me as a lien holder, which I have since notified the insurance company about. I took them an actual copy of the Judgement lien.
My question is, are they required to pay me to clear the lien before they pay the insured?
My question is, are they required to pay me to clear the lien before they pay the insured?
Posted: Wed Apr 15, 2009 01:31 am Post Subject:
Only if they are informed about the lien prior to payment. I don't know of any law that states the insured company needs to search for liens prior to issuing payment. Did you attach the lien to the vehicle? If so why does your lien not show on the title? If it does, I question how the insurance company is going to settle this loss with your lien on the title.
Posted: Wed Apr 15, 2009 02:06 am Post Subject:
Most property insurance contracts have language that protects the lienholder in this event- the "mortgagee clause" and it works just like a lienholder clause in car insurance. This is commonly called a "loss-payee" clause, and normally does NOT require notification to the insurance company prior to loss. This protects lienholders for title/deed changes when the insurer cannot be contacted, say, over a weekend. When purchasing a home initially, and assuming there's a lien, the lienholder will be protected at closing by the title company/lender insisting on proof of hazard insurance coverage naming the "loss payee" as an "additional insured."
This protects the lienholder in the event of covered loss to the insured property, and typically the mortgagee (in your case) will be named on any drafts or checks issued by the insurer for payment on the loss. The remittance will also normally have the named insureds named as well. This will, obviously, require the signatures of all named on the remittance in order to "cash the check."
If you can prove your lien (and in this case, judgment as well), you shouldn't have any problems getting recognized by the insurer. Let us know if you need anything else.
InsTeacher 8)
Posted: Wed Apr 15, 2009 09:45 am Post Subject:
Confusions!
My question is, are they required to pay me to clear the lien before they pay the insured?
Speaking about the lienholder clause, Insteacher has to say that no notification to the carrier is needed prior to the loss. On the otherhand, tcope has to say that the OP would be paid only when the carrier has been notified prior to payment. I think I got a bit mixed up in the end. Steven
Posted: Wed Apr 15, 2009 01:29 pm Post Subject:
Most property insurance contracts have language that protects the lienholder in this event- the "mortgagee clause" and it works just like a lienholder clause in car insurance.
This would be different for a couple of reasons. It's an auto policy, not a property policy and in most every state the insurance company needs to be informed of the lien holder before they would be required to protect them (only exception of know of is SC). The other difference is that I don't think the OP attached the judgement to the vehicle. That is, I think the OP has a judgment but no lien on the vehicle in particular. I'm not exactly sure what a "judgement lien on real property" is. I've always understood that someone obtains a judgment and then needs to attach a lien to real property. In this case I would think the OP would need to file a lien specifically against the vehicle.OP, I was under the impression that the carrier already paid the loss and then you brought the judgment to their attention. When I re-read your post it seems that they have not paid the claim yet?
Posted: Wed Apr 15, 2009 04:14 pm Post Subject:
a "judgment on real property" is a lien attached to real property. An automobile is considered "personal" property. We're more than likely talkinga lien on real estate here; a house, apartment, condo, etc.
Insurers are required to honor liens held on property even if the insurer has not yet been notified of the lien. Think of it this way- you transact business on your home, say a re-fi, and the producer neglects to inform the carrier of the lien and a loss occurs. As long as the lienholder can prove an insurable interesty in the property prior to the date of loss, there will be protection.
If you like, I can pull up our policy forms and quote language.
InsTeacher 8)
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