Insurance Check Made Out to Wrong Party

[Hal123]

My question involves insurance law for the state of: California

To start, I am not looking for feedback regarding the morality of this question.

A relative of mine was involved in an accident in my vehicle about two months ago in which she was not at fault. After being ignored by the other party's insurance company for quite some time, they finally began to cooperate. They said that their policy is to cut a check out to me for the visible damages, and then I am free to take the car to whatever body shop I choose. Any damages found while repairing the initial estimate would be paid straight from the insurance company to the shop.

About a week later, the check comes in the mail, and the insurance company made it payable to her, even though she the bulk of the property damage (the vehicle) is not in her name; it's my property.

My question is this: if she were to, hypothetically, keep the check and use it to settle the limited property damage she incurred in the incident, would the insurance company still be on the hook for the full damage to the car?

Thanks in advance

[jk]

what property damages would she have?

Does the check include a reference to what it is for?

It is possible the other insurance company is treating this as separate claims; her damages and your damages.

generally, she does not have the right to release your rights to a claim. Of course, if the payment was mistakenly sent to her, the issuer (the insurance company) could come after her for the improper payment regardless of what happens with your claim.

[Hal123]

what property damages would she have?

Does the check include a reference to what it is for?

It is possible the other insurance company is treating this as separate claims; her damages and your damages.

generally, she does not have the right to release your rights to a claim. Of course, if the payment was mistakenly sent to her, the issuer (the insurance company) could come after her for the improper payment regardless of what happens with your claim.

No, the check simply states "settlement of property damage claims."

No, it is not possible, as they do not even know she had any real property damage (she barely did), but it seems as if any property damage at all could qualify for a "misunderstanding" of what the check was intended for, since it was paid out to her and not the owner of the damaged property.

And how successful could they be going after her for improper payment when they cut the bad check?

[jk]

And how successful could they be going after her for improper payment when they cut the bad check?

Not sure what you mean. If it was a mistake, they would start with a demand to refund the payment. After that, they would likely sue her. Unless she can support a valid claim for the money, she will lose and the court would issue a judgment for the money. If her actions are beyond reasonable (like in: she knows the money is not hers and refused to refund it), the courts might award attorney fees to the insurance company as well. Then, the insurance company would have to collect on the judgment. Haven't checked what is available in your state but often times those actions include seizure of bank accounts, garnishment of wages, and seizure of personal property outside allowed exemptions. It also results in a judgment on her credit report and a lot of hassle having to deal with all this issues.

No, it is not possible, as they do not even know she had any real property damage (she barely did), but it seems as if any property damage at all could qualify for a "misunderstanding" of what the check was intended for, since it was paid out to her and not the owner of the damaged property.

either their was a claim made for property damages of her property or there wasn't. There is no: they don't know she had any real property damage. If there was no claim made for damage to her personal property, it is obvious this is not actually intended for her.

I would strongly suggest YOU contact the insurance company and notify them of the mistake. Failing to do so could extend the time it takes you to recover your damages considerably. They may just decide to attempt to rectify this situation before making any payment to you. While you would eventually recover your damages, how long and what it takes for you to do so may take a lot of effort and a long time.

[Hal123]

Not sure what you mean. If it was a mistake, they would start with a demand to refund the payment. After that, they would likely sue her. Unless she can support a valid claim for the money, she will lose and the court would issue a judgment for the money. If her actions are beyond reasonable (like in: she knows the money is not hers and refused to refund it), the courts might award attorney fees to the insurance company as well. Then, the insurance company would have to collect on the judgment. Haven't checked what is available in your state but often times those actions include seizure of bank accounts, garnishment of wages, and seizure of personal property outside allowed exemptions. It also results in a judgment on her credit report and a lot of hassle having to deal with all this issues.



either their was a claim made for property damages of her property or there wasn't. There is no: they don't know she had any real property damage. If there was no claim made for damage to her personal property, it is obvious this is not actually intended for her.

I would strongly suggest YOU contact the insurance company and notify them of the mistake. Failing to do so could extend the time it takes you to recover your damages considerably. They may just decide to attempt to rectify this situation before making any payment to you. While you would eventually recover your damages, how long and what it takes for you to do so may take a lot of effort and a long time.

She has a valid claim. She had installed equipment in the car that was hers that was damaged in the accident. The appraiser was notified of this, and said, "if we determine that it is, in fact, related to the accident, we will fix it." That equipment equals maybe half of what the check for the damage is, but they did not legitimately appraise the equipment, so i cannot assume that the check was made for that purpose.

In reality, I believe they erroneously issued the check for the damage to her because she was the driver at the time, despite the car being in my name. Obviously, since the equipment was not appraised, I cannot believe there would be a claim for her damage yet. That said, if she were to keep the check and replace the equipment, does the insurance company really have a case? She could have simply figured they over-estimated her damages, and that is why the check came in her name, no?

[jk]

Hal123;639539]She has a valid claim.

did she file a claim or not?

She had installed equipment in the car that was hers that was damaged in the accident.

that was not her equipment. That was yours. Equipment installed in your car becomes part of the car.

It sounds like she uses this car as her own. Unless she resides with you, your insurance company might have a real issue with this. Maybe this insurance company is confused by things such as: she is the one contacting them and when she speaks of the car, she says; My car.

In reality, I believe they erroneously issued the check for the damage to her because she was the driver at the time, despite the car being in my name.

sounds likely.

Obviously, since the equipment was not appraised, I cannot believe there would be a claim for her damage yet.

That said, if she were to keep the check and replace the equipment, does the insurance company really have a case?

of course this statement:

"if we determine that it is, in fact, related to the accident, we will fix it."

followed by this:

but they did not legitimately appraise the equipment,

is what a well known comedian would say:

Here's your clue

She could have simply figured they over-estimated her damages, and that is why the check came in her name, no?

and when they demand the check be returned because that is not what it was for, she can either refund the money or deal with whatever the insurance company decides to do about it (see long explanation above)

the fact is, she is owed nothing. If the equipment is covered, then the payment is to you. It is part of YOUR car so you are the one considered to have a claim here.