by Guest » Wed Sep 15, 2010 11:10 pm
I work for an auto finance company in CT. We are the lienholder on a vehicle that was damged. Insurance company sent two party check to customer with customer and body shop name on it. Customer cashed this check and is refusing to pay body shop for repairs. Insurance company said they used outside firm to confirm that just the customer signed check and bank did cash it. Insurance company said they are out of it now that bank cashed the check in error. I would like them to properly cover our lien interest in this and go after whoever they want. They disagree. What are our rights?
Posted: Wed Sep 15, 2010 11:18 pm Post Subject:
The insurance company should at least help you. They need to contact the bank (as they are the ones who drafted the check) and find out what the need to do to file a fraud claim (or what ever it's called). Basically, they fill out a form confirming some information and their bank backs out the funds. This means that the insurance company gets their money back from their bank so that they can put their insured's name on the check as well as the lien holders. This also means that the insurance companies bank charges the funds back to whatever bank the insured deposited the check at (as _they_ made the mistake). That bank is then responsible to recover their funds.
Did the insurance company protect your rights? I'd say yes. It was the insured's bank that made the error. Of course if you don't get paid you could always file suit against the insurance company and they would end up spending a lot more money defending the case. Plus, only the insurance company can ask for a charge back as it's their funds.
You will probably need to speak to a supervisor or manager to resolve this issue.
Posted: Wed Sep 15, 2010 11:58 pm Post Subject:
There's no mechanics lien on the car? Normally, until all liens are satisfied, the mechanics lien will still be in place.
InsTeacher 8)
Posted: Thu Sep 16, 2010 06:49 am Post Subject:
Of course if you don't get paid you could always file suit against the insurance company and they would end up spending a lot more money defending the case.
That's one good reason why any insurance co. tries to avoid legal suits. It often turns out to be a costly investment of time and money, while the outcome is not always in their favor. It's worth saving both if they settle it outside the court and also saves their reputation. They don't wanna add a 'bad faith' to their name.
Posted: Thu Sep 16, 2010 07:03 am Post Subject:
Sounds to me like the insured's bank is at fault for cashing a check that required two endorsement signatures when it may only have had one. If nothing else, the issuing insurance company could assist you by providing a copy of the check image -- front and back -- to show who cashed the check and when, and how it was endorsed.
I would like them to properly cover our lien interest
You may want them to do this, but they really have no liability to you in this instance, which is why they have indicated that they are unwilling to assist you. Let me explain.
If the body shop has released the vehicle to the insured without receiving payment (why would they even do that?), that's a contractual issue entirely between them and the insured. As such, failure to pay represents a breach of contract, allowing the body shop to pursue its claim in court (or arbitration, depending on the repair contract language).
As the lienholder, you have no responsibility to the body shop, and the whole matter should not even be an issue with you at all, since the vehicle obviously was not totaled -- which is the only time the insurance company's responsibility is to you and not to the insured (unless the ACV of the vehicle exceeds the remaining lien encumbrance).
Could your security in the vehicle be impaired by a mechanic's lien? Yes, that's possible, if one was even filed (doubtful if the vehicle was released prior to receiving payment). But your loan contract probably has an acceleration clause allowing you to collect the full outstanding balance on the note in the event of a subsidiary lien such as that. Failure to pay the money would allow you to repossess the vehicle for breach of contract.
That creates a different problem for the body shop as far as a security interest they may try to invoke against the insured. But a mechanic's lien on the vehicle does not allow the body shop to repossess like your loan contract does. The lien merely puts an additional burden against the title to the vehicle that would have to be satisfied if the insured tried to sell it.
The only way the body shop could lawfully acquire the vehicle is to pursue its claim in court, win, and later obtain a seizure order after the defendant (insured) fails to pay. But if the vehicle is already in your possession (and perhaps even disposed of), then the body shop has to go after some other valuable asset(s) of the insured instead.
Still, none of this is the insurance company's responsibility. If the auto body mechanic is pissed off at not receiving the payment, that's who should be complaining to the insurance company seeking information / assistance about the errant cashing of a two-party check.
Posted: Wed Feb 16, 2011 05:26 pm Post Subject:
body shop does not have a mechanics lien on vehicle, has storage fees over 300 days, repo company wants to take the vehicle. Can I demand the storage charges from the repo company?
Body shop
Posted: Thu Aug 04, 2011 03:03 pm Post Subject:
If you get a title loan from a loan company and the title was never in your name or transferred to your name, do that loan company have the right to place a lein on the vehicle if the person whos name on the title didnt receive the loan???
Posted: Thu Aug 04, 2011 08:22 pm Post Subject:
First, see my sig.
More of a legal question then anything to do with insurance. My guess is no. The title company should have obtained a copy of the title to verify that the collateral the person was using was indeed owned by them. I'd think also that the title company would have placed a lien on the vehicle at the time they made the loan.
However, if the person who took the loan represented that they owned the vehicle then there might be some fraud involved in obtaining the loan. Basically this would mean a world of hurt for the person taking the loan.
Posted: Thu Aug 04, 2011 11:18 pm Post Subject:
As tcope has said, this is a legal issue, not an insurance matter. How would a person who does not possess title to property encumber that with a loan? I can't see it happening unless someone misrepresents the ownership of the property.
It is incumbent on the lender to secure its interest in the property by adding itself to the title or placing a lien against the property. But if the owner is not the party who encumbered the title, I doubt that the lien or title change is enforceable.
On the other hand, a person who misrepresents their interest in property in order to obtain a loan commits LOAN FRAUD, usually described in a state's penal code. That can be worth up to five years in the close company of one's new spouse, Bubba, including all rent, utilities, and meal service -- not to mention the other "service" you may receive from Bubba.
Posted: Sat May 18, 2013 12:22 am Post Subject:
My vehicle was involved in a accident and the insurance company sent out 2 checks: One directly to me and the other directly to the body shop. The body shop returned my vehicle in March and afterwards I realized I still had the insurance check so I cashed it. One month later, the body shop cantacts me stating the check I cashed should have been paid to them and is now threatening to repo my vehicle. Do they have the right to repo my vehicle?
Posted: Sat May 18, 2013 12:23 am Post Subject:
My vehicle was involved in a accident and the insurance company sent out 2 checks: One directly to me and the other directly to the body shop. The body shop returned my vehicle in March and afterwards I realized I still had the insurance check so I cashed it. One month later, the body shop cantacts me stating the check I cashed should have been paid to them and is now threatening to repo my vehicle. Do they have the right to repo my vehicle?
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