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  1. #1
    Join Date
    Mar 2014
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    5

    Default Can a Insurance Company Pay Lien Holder Without My Approval

    My question involves insurance law for the state of: California

    My motorcycle was vandalised in a theft attempt (in California) and I filed my insurance. The insurance company totalled the motorcycle and I received an offer which was well below what I perceive the real value of motorcycle, therefore I started writing to my insurance company to raise that offer. This went on for about six months. They offered me to get an appraisal done by person of my choice but I don't think any appraiser can get the fair value of the motorcycle six months down the line as the value of the motorcycle depreciates over time.

    Today I received a call from my insurance company saying that since the case has been dragging on for months now, if I don't release the motorcycle to them, then they will make the offer-value payment minus the salvage value to the lien company and then return the motorcycle to me.

    It did not say anything in my policy that such thing can be done, and I told them that they cannot do it. However, I will really appreciate if anyone has any idea about it, and whether the insurance company can actually do such thing?

  2. #2
    Join Date
    Sep 2005
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    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    I expect that you were required as a matter of contract to name your lender as an interested party on your auto insurance. You can read your insurance and loan contracts to find out what the companies are permitted to do under the circumstances.

    You are choosing not to negotiate in good faith, refusing to even get a free appraisal with the appraiser of your choice, so the insurance company is going to explore other avenues to close out your claim.

  3. #3
    Join Date
    Mar 2014
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    5

    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    They did not say that the appraisal is free, they just that I can get it appraised myself.

  4. #4
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    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    I inferred from "they offered" that they were offering to pay. You don't need their permission to get an appraisal. You're not an appraiser, and they know what their own appraiser says.

  5. #5
    Join Date
    Mar 2014
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    5

    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    I have been negotiating with them for a long time. Today when the claims processor called me, I asked him under which specific section of the policy can he directly pay to the lien holder and he replied "not everything is written in the policy". I am really not sure if any insurance company can do such thing, therefore I was curious, are such cases common? Can insurance companies do this?

  6. #6
    Join Date
    Sep 2011
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    OH10
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    17,019

    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    Were you continuing to make your insurance and motorcycle payments over the 6 months while you played games? The lien holder has a secured interest in the vehicle and a right to obtain reimbursement when their security interest has been lost due to damage and your insurance is the paying company.

  7. #7
    Join Date
    Mar 2014
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    5

    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    Absolutely, I have never missed a payment even when insurance company took possession of the motorcycle.

  8. #8
    Join Date
    Sep 2011
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    OH10
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    17,019

    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    Refer to your loan contract regarding total loss of the secured vehicle and your insurance policies obligation to pay the lien creditor upon total loss.

  9. #9
    Join Date
    Mar 2014
    Posts
    5

    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    That's the thing, I have gone through the entire contract from the lien holder and it does not say anywhere about the total loss. I have gone through my entire policy and it does not mention anywhere that the insurance company can pay the lien holder without my consent. So I am a little confused as to whether insurance company is bluffing to force me to release the vehicle or can they actually do it.

  10. #10
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Can a Insurance Company Pay Lien Holder Without My Approval

    As their security is in jeopardy by your refusal to settle I would say they have the ability to settle at the end point of the max time you can drag this out to prevent the lien holder from incurring a loss.

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