by Guest » Tue May 13, 2008 06:05 pm
Hello,
I understand that if I file a claim for the damage a storm did to my vehicle, and there is a loss, the insurance company (as long as I have comp coverage) will issue a claims check. And if the vehicle's title is held by a bank, the check will likely include ME AND TEH LIENHOLDER, or ME AND THE BODYSHOP.
Well...what if they issued the check in my name ONLY?
Here are my questions:
1. If I decide to cash the check and use it entirely to pay down my loan balance, could this come back to bite me?
2. If I used this check for a family emergency, or really anything BESIDES the damage of the vehicle, could this come back to bite me somehow?
3. Are there any risks in using the claims check NOT for what it was issued for?
I understand that if I file a claim for the damage a storm did to my vehicle, and there is a loss, the insurance company (as long as I have comp coverage) will issue a claims check. And if the vehicle's title is held by a bank, the check will likely include ME AND TEH LIENHOLDER, or ME AND THE BODYSHOP.
Well...what if they issued the check in my name ONLY?
Here are my questions:
1. If I decide to cash the check and use it entirely to pay down my loan balance, could this come back to bite me?
2. If I used this check for a family emergency, or really anything BESIDES the damage of the vehicle, could this come back to bite me somehow?
3. Are there any risks in using the claims check NOT for what it was issued for?
Posted: Mon Apr 13, 2009 08:55 am Post Subject:
I'm sure that it won't cause a problem if you stay current with your loan repayment. This is what Lori too has mentioned.
FK, how the Loan contract would interfere in this matter? The claim check was directed to the claimant and IMO he has the right to use the money on his wish.
Posted: Mon Apr 13, 2009 11:52 am Post Subject:
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FK, how the Loan contract would interfere in this matter? The claim check was directed to the claimant and IMO he has the right to use the money on his wish.
I agree.
But, in this case the Insurance Contract is only one of two Contracts [Loan Contract being No. 2] that could create limitation on what the Automobile owner can/can not, do with the insurance check / and or Collateral. Both Contracts must be managed by the Automobile owner.
Also if the automobile is taken to a repairer and repairs are authorized by the owner a Third Contract would be entered into that would also need to be managed by the automobile owner.
Managing three contracts base on a single accident could get complicated if one were to get a little to creative.
That's my 2¢ worth for now. ( maybe ± a couple ¢ ) :)
FK,
Posted: Mon Apr 13, 2009 01:00 pm Post Subject:
The claim check was directed to the claimant and IMO he has the right to use the money on his wish.
Simon had it truly been a "claimant" (or what 'we' call a ''claimant'' 3rd party) rather than insured (1st party) you would be 110% correct..(unless it's a total loss that is :roll: )....Posted: Tue Apr 14, 2009 04:44 am Post Subject:
Simon had it truly been a "claimant" (or what 'we' call a ''claimant'' 3rd party) rather than insured (1st party) you would be 110% correct..(unless it's a total loss that is )....
Agreed Lori and that is just what I was wondering. FK has mentioned that the insurance contract would have bindings that would prevent the claimant to use the check on his discretion. But if we presume it’s a 1st party claim where the insured has claimed under his policy, isn't the insurer required to involve the lienholder automatically in the claim check, which hasn’t happened in this case?
Fk, how the insurance contract can limit the options available to the policy holder?
Posted: Tue Apr 14, 2009 09:35 am Post Subject:
Hi Lori,
What could be the possibilities when you default on the loan, the lender repossesses and the carrier needs to pay for the claim again? What happens to you then? Does that lead you to a lawsuit?
Steven
Posted: Tue Apr 14, 2009 09:47 am Post Subject:
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Fk, how the insurance contract can limit the options available to the policy holder?
The answers are in your insurance policy. Read it and you will find them.
From what I've read so far it seems the insurer made an error when they issued the check, But just because the insurer made an error does not change the automobile owner's obligation to meet the terms of the Loan contract.
Posted: Tue Apr 14, 2009 01:28 pm Post Subject:
But if we presume it’s a 1st party claim where the insured has claimed under his policy, isn't the insurer required to involve the lienholder automatically in the claim check, which hasn’t happened in this case?
absolutely, and 110% correct...the carrier clearly screwed up or the insured did not name the leinholder when the polilcy was purchased..Hi Lori,
Well it would lead to a lawsuit if the insured didn't pay the insurance company back immediately or make arrangements to make payments (if it was re-po'd and claim was paid again)...and yes, I have seen this happen a handful of times in my career...the insured would be sent a demand, (after the carrier paid it the second time)...then if the insured doesn't respond positively the carrier would quickly get a judgement and collect on that judgement in whatever way is allowed by that particular state.What could be the possibilities when you default on the loan, the lender repossesses and the carrier needs to pay for the claim again? What happens to you then? Does that lead you to a lawsuit?
Steven
Posted: Thu Apr 16, 2009 11:46 pm Post Subject: What if I own my car
I got rear ended and there was cosmetic damage to my car. The guy who hit me isn't contesting it. I own my car, and want to avoid the whole body shop tango. The last time this happened on another car, my car was in the shop for a week, and I wound up paying hundreds in rental car fees. I reported it to the guy's insurance company, and they're sending out an adjuster. Can I just ask if I can get an estimate, then have him write me a check made out to me, and I can then decide if I want to get it fixed or use the money to cover other bills? I own my car, and realize that if I were to sell it, the value would go down. But right now, the money would come in handy.
Posted: Fri Apr 17, 2009 12:40 am Post Subject:
Can I just ask if I can get an estimate, then have him write me a check made out to me, and I can then decide if I want to get it fixed or use the money to cover other bills? I own my car, and realize that if I were to sell it, the value would go down. But right now, the money would come in handy.
ABSOLUTELY Harry ! You are what we refer to as a 'third party claimant' his carrier has no obligation to protect your lien holder (if you have one)...just tell him or her to please issue payment directly to you and you will let them know if and when you put it in the shop and will require a rental car...but right now you doubt you will be repairing for several months...Posted: Fri Apr 17, 2009 01:10 am Post Subject: Is this something I can be direct about?
The adjuster is coming in a couple of days. Can I just say this to him, or do I have to pretend I'm going to get it fixed. I guess my question is, does the insurance company really care what I do with the money if I own my car? Also, will a body shop do an estimate without trying to get the insurance company information from you, just so they can put pressure on you not to walk off with their estimate. Do they ever charge you for the estimate then credit you if you have your car fixed there?
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