by jacquet17 » Sat Nov 06, 2010 12:31 am
I was issued a vehicle total loss insurance check directly to me. However there was a lienholder on the vehicle so I called the insurance company to ask why it was issued directly to me, the insurance comany told me that the lienholder, sent them the paperwork releasing the car title, and said the loan was paid off. I waited a month with no phone calls from the lienholder, so I spent some of the money. Now the lienholder is calling threatening me with insurance fraud, however I did not receive this money fraudulently. The insurance company issued the check to me because the lienholder released the title and told them the loan was paid in full. I need to know what the lienholder can do from this point, and what I could be facing. Thanks
Posted: Sat Nov 06, 2010 03:13 am Post Subject:
I'd obtain a copy of the title from the insurance company and confirm that the lien holder signed off on the lien.
Signing off on the lien against the vehicle and your obligation under the loan contract might be two different things. You'd really need to ask an attorney about this... not insurance people.
Posted: Sat Nov 06, 2010 11:24 pm Post Subject:
What's your understanding of the loan balance on your vehicle at the time of the collision? If there was a balance, you still owe it. What you have done is not "insurance fraud" (unless it was your intent to collect on a false claim), but you could be guilty of "breach of contract" for not paying your loan balance.
That the lender released title to your vehicle may have been an error on its part, but it probably does not create a "breach of contract" on its part that would release you from liability for the repayment of your debt.
You haven't been given a "free pass" on this one.
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