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We have experts of every nature here and I'm hoping someone can help with an insurance situation. I have a vehicle that books (KBB) in good condition, private party sale, for $3200. Had a pretty significant hail storm a couple of weeks ago causing damage. The catarosphe center estimated the damage at $5100. With no intentions to do $5k in body work to a $3200 car I had them make the check payable to me and the lien holder with the intention of applying it towards the loan, almost paying it off (I know I am upside down and planning to keep it until paid for). Kind of surprised it isn't totaled but that is where we are at. The lien holder won't apply the check towards the loan because "that is insurance fraud". The insurance company says the only other thing they can do is destroy the check and cut another to myself and a body shop of my choice but again I don't understand the logic. Do I have any other options? ----------------------------------- | ||
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It seemed like a good idea... |
Not sure about them cutting a check to the lien holder... But ive given my insurance insurance company a quote from the body shop, then cut ME the check and I can do whatever it is I want to do with the money. Have had them do that more than once. Just go that route. Have them send YOU the check in your name only. Cash it and pay on your loan. That may very by state or insurance company though, im not sure. Now there will most likely be an issue down the road if you try to make any other damage claim on your insurance if you didnt fix the damage with the money. That is what my agent told me.. but only on the affected damaged areas. I am surprised though they are cutting a check for more than the vehicle is worth... Especially that much more? Im surprised they didnt total it and cut you a check for its market value. -Jay "Assault is a type of behavior, not a type of hardware." -Alan Korwin | |||
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The insurance companies policy is that anything over $5k cannot be cut to the individual only. Has to be me and the lien holder or me and a body shop. ----------------------------------- | |||
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teacher of history |
See if they will rewrite the check for $4900. | |||
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safe & sound |
See if they will rewrite the check for $ | |||
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| Member |
When my car received hail damage, the cost to repair was more than the car's worth as well. So my insurance totaled the car, gave me a check for what the car was worth (after some "discussions") and I had a salvage title for the car until I could get it fixed. Of course I didn't ever plan to get it fixed. It was all cosmetic on a 10 year old car and I drove it for a few more years until it finally died on me. Check was only made out to me. I've never heard of insurance writing a check for more than a car is worth. Generally once the repairs cost more than a certain percentage of the value (I think 50 or 60%) they typically just total the car. ------------------------------ I'm a right wing, anti-illegal, pro-life, gun owning, straight, white, college educated, politically informed, conservative, Christian male. Liberals hate me. | |||
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Someone has since told me they use NADA retail to determine value with 80% being the threshold. If that is the case, $5100 is $250 shy of being totaled. ----------------------------------- | |||
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| Member |
I used to be an underwriter for Aetna insuring trucking companies among many other types of businesses. Making out the check to you and the lien holder is not fraud. Making out the check to you alone (if you have a loan) IS fraud. What would your lender say if the car had been stolen? No body shop to write that check out to. I'm sure the lender would want that check made out to them and you. Nothing requires you to fix the damage. Your car has sustained a loss in value and that is between you and your lender. As long as you use the claim check to either a.) Restore the value of the car i.e. repair it, or b.) pay off the lender, there is no fraud. I have done this myself with a hail damage claim and got no such talk from my lender. Go back to your bank and try to talk some sense into them. Or have your claim rep do it. If it was insurance fraud, I seriously doubt your insurance company would have issued the check that way in the first place! | |||
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Keep in mind if you don't fix it, the insurance company MAY not want to provide comprehensive and / or collision coverage since they have essentially paid out the full value of the car. | |||
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Member |
Am I understanding you correctly that the car is only worth $3200? You need to find out what is going on, cause that should be totaled at least twice over. Why would the 5k figure even come into play, because they aren't going to pay you more than the $3200 value of the car minus the salvage value if you keep it anyway. "The people hate the lizards and the lizards rule the people." "Odd," said Arthur, "I thought you said it was a democracy." "I did," said Ford, "it is." "So," said Arthur, hoping he wasn't sounding ridiculously obtuse, "why don't the people get rid of the lizards?" "It honestly doesn't occur to them. They've all got the vote, so they all pretty much assume that the government they've voted in more or less approximates the government they want." "You mean they actually vote for the lizards." "Oh yes," said Ford with a shrug, "of course." "But," said Arthur, going for the big one again, "why?" "Because if they didn't vote for a lizard, then the wrong lizard might get in." | |||
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According to KBB it is worth $3200 and $6500ish per NADA. The $5100 absolutely comes into play because I already have the check in my hand. The problem is that the lien holder won't accept it towards the balance because, in their words, "that's insurance fraud". ----------------------------------- | |||
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| In the yahd, not too fah from the cah  |
What insurance company is this? I've never heard of this rule. I've cut checks to individuals for $20k before. And most insurance companies use the number around the NADA trade in value to determine total loss. The appraiser that wrote the estimate will usually run a VVS report to determine the exact value of the vehicle to determine if it is a total loss. As for the insurance fraud bit, it's really not because you're being paid for the loss incurred. Whether or not you choose to fix the damage is up to you. Now if you try to claim the same damage again another time that's another story. But no, pocketing the money from a legitimate claim is not insurance fraud. | |||
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