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: Thu Nov 04, 2010 02:42 pm Post Subject:
Hey Everyone,
My truck was declared a total loss due to an accident. I still owe on the truck loan but my truck is not worth as much as i still owe on the loan. I do have gap insurance though. My questions are:
1. If the check is made out to me then can i cash it and use some money for bills?( I will pay off the amount of the loan when i get my income tax check back.) I just need the money now. Being on a monthly income now is hard to adjust to.
2. Is it against the law to do that? I live in Penna. If it is then i won't do that.
3. How does the gap insurance work? Does that company make out a check to me and i forward it to the financial institution?
Thank you for your help in advance
Posted: Thu Nov 04, 2010 03:01 pm Post Subject:
The insurance claim check, if made out to you and not to you and your lender is between you and the insurance company. It should have been made out to your lender as the loss payee.
If you choose to use the money for something other than paying off the note on the truck, that's your choice, and it is not unlawful. But you may soon discover that since the insurance has been canceled on the vehicle, your lender is going to "insure" it with coverage that is VERY EXPENSIVE and will be added to the loan balance. No escape from that, until you tell them that the vehicle has been totaled . . . in which case they will rely on the "acceleration clause" in your loan contract and demand that you pay the full balance of the note IMMEDIATELY.
Failure to pay is a BREACH OF CONTRACT for which you may be sued in civil court.
GAP ("Guaranteed Auto Protection") payments are also supposed to be made payable to the lender. Understand that GAP coverage, in combination with your collision coverage, may still not be sufficient to cover the full balance of your note.
You would be wise to use the AUTO INSURANCE money to pay-off the loan on the vehicle, as it was intended to do, instead of using the money for "other" bills/expenses/pleasures.
Posted: Thu Nov 04, 2010 05:23 pm Post Subject:
I'm guessing that the check has not been made out to just you... as then the insurance company would still be on the hook to the LH, your GAP carrier would never pay the difference and the insurance company would not get the title to the vehicle.
So I just don't see this happening.
You want to take the money owed to your LH and spend it on yourself? I'm wondering why you are upside down on your loan. :roll:
Posted: Mon Nov 08, 2010 12:36 pm Post Subject: Payment to me only
I am wanting the insurance to pay me the amount so I can fix it. Had some trouble with getting my last car fixed. Other than paint work I can do it all. My insurance will release to me and bank only. Leinholder will release money to party fixing my car. Is there a way I can get the payment? Any rights?
Posted: Mon Nov 08, 2010 02:20 pm Post Subject: Inherent diminished value
Does Kentucky recognize this. My vehicle is currently for sale on cars.com and has the free carfax check. It will show this accident and then I will get less money for it. If I trade I would lose money also no matter who made the repairs. Is this correct? How is the amount determined? Is there a formula they use? Thanks
Posted: Fri Nov 12, 2010 03:50 pm Post Subject:
Thank very much for good advice.
Posted: Thu Jun 23, 2011 10:55 pm Post Subject: lien holders
if we get a check for damage to a rv from our insurance do we have to give it to our lien holder if we dont fix it or can we keep it
Posted: Fri Jun 24, 2011 04:08 pm Post Subject:
Unless the check has the name of the lienholder on the PAY TO THE ORDER OF line, the money is yours, and you are free to use it as you choose. But your loan contract may have language that obligates you to maintain the secured property in good order, so if you don't use the money for that purpose, you might be violating your contract.
Posted: Wed Aug 31, 2011 03:46 am Post Subject:
Ok, I have a question. I am financing a vehicle, I told the agent when I started my policy, but my insurance company never added the LH to my policy. I was in a accident and now my truck has been deemed a total loss. Will the insurance company send the check to me in my name only?
Posted: Wed Aug 31, 2011 05:08 am Post Subject:
If your insurer did not add your lien holder in your car policy, then you may ask them to write a check on yours as well as your lien holder’s name.
Since the lien holder was still the legal owner of the car at the time of being totaled, the insurance company will take a portion of the totaled amount to cover its financial interest, or else he (or the bank) would take the compensation from you directly.
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