Insurance Co will not add us (lender) as lienholder

by Guest » Tue Jun 25, 2013 09:51 pm
Guest

We are an indirect auto lender. Our customer's insurance company refuses to add us as the lien holder. I offered to send the a copy of the retail contract and application for title from the state of Georgia and they still refuse.

Is there anything we can do??

Can we force the insurance company to add us as lien holder or loss payee?

Thanks!

Total Comments: 9

Posted: Wed Jun 26, 2013 12:58 am Post Subject:

Here is my question... and to get a full understanding of the situation, what is the reason they are giving for their refusal to add you as a lien holder?

Posted: Wed Jun 26, 2013 12:52 pm Post Subject:

Thanks for the response. Ins co is saying that customer told them not to add us, even though he signed a retail contract that requires such. We also have the application for title from GA.

Posted: Wed Jun 26, 2013 01:12 pm Post Subject:

We also have the application for title from GA.

and

Can we force the insurance company to add us as lien holder or loss payee?

So this means you have possession of the DMV title certificate showing you as the legal owner, correct?

If so, providing that documentation to the insurance company should suffice as proof of entitlement to lienholder status as an additional insured/loss payee.

If they continue to refuse, then you should file a complaint with the Georgia Department of Insurance (the state in which the vehicle is registered).

You may also have the contractual right to repossess the vehicle or obtain "forced-placed" insurance on the vehicle at the buyer's expense for failure to provide proof of insurance with you as the named additional insured/loss payee. What rights does the language of your "retail installment agreement" provide to you? Seek to enforce your contractual rights or be forced to abandon them by involuntary waiver for failure to act ("estoppel").

Posted: Wed Jun 26, 2013 02:19 pm Post Subject:

Thanks. Yes we have title app and will soon have cert showing us as legakl owner. We use Bankers and LAW retail contarcts so we will be enforcing our rights against the customer at this point.

But I was more curious about the Insurance Co and their unwillingness to add us as lienholder. I had never encountered this situation before. Ins Co is saying that since their customer is instructng them NOT to add us, that they must abide.

I haven't seen anything that would mandate that they add us. So you are saying taht by sending them the documentation should suffice?

Thanks again.

Posted: Wed Jun 26, 2013 02:28 pm Post Subject:

Ins Co is saying that since their customer is instructng them NOT to add us, that they must abide.

This is a smokescreen. State law gives the legal owner of property an insurable interest that the insurance company MUST recognize. To place the customer's "request" above the legal right of a lienholder violates your property interest and probably also violates GA state law.

As lienholder, it is your choice to be an additional insured or not. If your loan contract demands that you be added as such, then it is a breach of the loan contract on the part of the debtor to fail to add you (or demand that you not be added). As the owner of property subject to insurance, your insurable interest permits you to be added as an additional insured/loss payee.

The insurer has no legitimate basis for denying your demand, although it has no contractual responsibility to you. But the enforcement of your contractual right of recovery can extend to your debtor's insurance company. It costs them nothing to add your name to their contract with their insured. I fail to see why they are acting in this manner.

You should file a complaint with the GA Dept of Insurance IMMEDIATELY!! Start here: https://gov.sircon.com/consumerPortalLogin.do?method=initProcess&request.authorization.token=jvz9dNrJw6l16mW02DLPL9zC7FXgMSYc That should resolve the matter quickly.

In the meantime, enforce whatever other contractual rights your loan agreement gives you as long as you don't violate any rights of the debtor.

Posted: Wed Jun 26, 2013 03:59 pm Post Subject:

Thank you very much for your reply. Great info.

Posted: Thu Jun 27, 2013 04:43 am Post Subject:

Do you require in your loan that you be listed as the lien holder? If so, have you informed your customer of this? Why is he/she refusing to have the insurance company add you? Do you really want to allow this person a loan when they _clearly_ are not conforming to the terms of the loan agreement?

I fail to see why a person who obtained a loan would instruct their insurance company not to list the lien holder. Yes, the insurance company should add you on but I can see where they may require proof that you are the lien holder. They are in a tough situation, damned if they do, damned if they don't. Once you are added the insurance company will need to inform you if the policy is going to cancel. I suspect this will happen very quickly.

Posted: Thu Jun 27, 2013 08:28 pm Post Subject:

Yes we do require such, but we cannot reach the customer. We obviously do not want this type of customer and will exercise our rights under the contract.

My real concern/question was with the insurance company's unwillingness to add us, even with the documentary proof of our status. Had never had this happen before.

Posted: Thu Jun 27, 2013 08:41 pm Post Subject:

but we cannot reach the customer.

Never a good thing.

My real concern/question was with the insurance company's unwillingness to add us, even with the documentary proof of our status.

That's why you need to file the complaint with the GA DOI. As soon as possible!!

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