Ok- you make an insurance claim and the company says they will send you a check. does the lienholder get it?
Answer:
There seems to be a little confusion on this, although most of these answers seem somewhat correct. I am a Claims Adjuster (Agents sell the policies, but we're the experts that handle the claims).
There are cases where we would have to make the check out to the lienholder and the insured and cases where we don't.
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Here is some terminology to understand my response:
Insured = the person that has purchased insurance through us.
Claimant = the person that was involved in the accident with our insured.
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If the vehicle is a total loss, there are no if's, and's, or butt's; we must payoff the lienholder and then pay any remaining amount to the customer (regardless if they are a claimant or insured).
If the vehicle is repairable, then we can simply "cash out" the claimant and the lienholder does not have to be on the check. However, this is not the case with the insured. With the insured, either the lienholder or the body shop must also be on the check. This is due to the fact that we have a contractual obligation to the lienholder under the terms of the policy. With the claimant, we do not have any obligation, since the claimant has not signed a policy contract with us.
I hope this wasn't too confusing.
Usually depends on the amount of the check. If it's for a significant portion of the value of the car they'll make it out to both of you.
The lender wants to make certain their interests are protected.
It depends.if the vehicle is totaled, then the insurance company will cut a check for the amount owed to the lien holder and a check for the balance to the insured. If the car was just wrecked and not totaled, then no, they will cut the check to the dealership or the body shop repairing your car.
In most cases, I believe the insurance company will make the check payable to both the lienholder and the insured. When that happens, you have to get the check endorsed by the lienholder before you can cash it.
With most companies, the check is mailed to you. If you have lien on the vehicle, it could be on the check, OR the repair shop. Typically, both are not. The insurance company wants to be sure the vehicle is repaired, and based on the amount of damage, the lienholder wants it repaired as well. You can eliminate both if , #1 - you pay off the loan, and #2 - delete full coverage from the vehicle. Thus, neither care if you fix it.
If the value of your car is $15000 and you owe $10000, your insurance company will send a check for $10000 to the leinholder and ask them to sign off the loan. They will send you a check for $5000 once they have the signed release from the leinholder. At least that how it works at the company I work for. Also it could vary by state. I am in California.
I guess it depends on the insurance company I was in an accident and it was the other parties fault although my vehicle was financed I received a draft check for over $13,000 in my name, per the insurance it was my responsibilty to notify the finance company about what happened to the vehicle.
On you auto policy there is a leinholder clause. If the vehicle is totaled then yes the check will go to the lienholder and after the loan is paid the remainig will go back to you. Keep in mind though most totaled vehicles you are lucky to get the loan paid off. If it is a check for a repair then it will be sent to you.
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