by darla » Tue Aug 31, 2010 04:44 pm
I am the lienholder on a vehicle that caugth fire. The insuance sent a notice on 6/21/10 of canc back dated to 6/2/10 due to a bounced check from the insured. The date of loss is 6/28/10. Under SC law do I have at least 10 days worth of leinholder coverage from the date of notice, in this case 6/22/10?
Posted: Tue Aug 31, 2010 10:56 pm Post Subject:
What difference does that make? If the loss was on 6/28, you're still at least 6 days away from the event. Were you notified that the insurance had (or was about to have) lapsed on or about 6/2? If you were not, was it because you were not listed as an additional insured or lienholder on the policy? The notice of lapse dated 6/21 is the notice of lapse. No coverage extends beyond the point identified as the lapse date. There are no special exceptions for bad checks.
Normally, an insurer will also give notice to the lienholder of an impending lapse, so the lienholder can either (1) pay the premium [and then collect it from the borrower] or (2) obtain other coverage to avoid a lapse [and then collect the premium from the borrower].
With no insurance to collect a claim against, your only recourse is against the borrower for the unpaid balance of the loan -- according to the scheduled payments, or the full amount in the event of a breach of contract.
Good luck with that.
Posted: Wed Sep 01, 2010 02:52 pm Post Subject: Yes, I am listed as lienholder
Thanks Max, I am listed as lien holder. I did NOT get the cancellation notice dated 6/21/10 until recently when the ins co faxed me a copy of what they say was sent out on 6/21/10. THAT notice canceled coverage on 6/2/10. I had my collateral in the street for 19 days without insurance due to the fact they took a bad check! All the major companies give advance notice that a policy will cancel. As you stated, to allow the lien holder time to secure other insurance or the vehicle. My point is this, the major companies sometimes send a notice saying the insurance canceled back to a previous date, but the notices say I have lien holder coverage for at least 10 days FROM THE DATE OF THE NOTICE. NATIONWIDE GIVES 15! Are the major companies doing this OUT OF THE GOODNESS OF THEIR HEARTS (NOT LIKELY) or is there a statute that requires this extra period of coverage for lien holders?
Posted: Thu Sep 02, 2010 03:45 am Post Subject:
I can't vouch for the laws outside California, but it's not a requirement here. If it is being done, it is as a courtesy. And it's good PR.
The party that wrote a bad check would probably have known even sooner than the cancellation notice, since he would have received an overdraft charge from the bank.
So have you obtained coverage on the vehicle and are you charging it to your debtor?
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