If I owe a lender who pays the lender - me or the insurance company? I.e. can I request the whole refund check and pay the lender myself? Or is there any regulation that says the insurance agency must pay the lender.
In my case the insurance company wants to pay the lender but I have requested the whole blue book value redund. I have not heard back form them yet.
The car is about half paid off...
Boots
Favorite Answer
The insurance company will pay the lien holder the payoff amount.
That's because the lender sends the insurance company the title in exchange for paying off the loan. The insurance policy has a loss payee clause that says the insurance company will protect the lenders interest in the vehicle. They do that by paying the lender for the total loss.
If there is any equity in the car, then that is paid directly to you. But the payoff amount is paid to the lender.
Mushu
Lol. Whole blue book value? Good luck with that.
All states require the insurance company to pay the lender. Until the vehicle is paid off fully - the lender is the legal "owner" of the asset. Therefore, the insurance company must protect the interests of the title holder. It's not that they just "want" to - it's that they must.
Dan B
There is an agreement between your lender and your insurance company. It's a condition that your lender places on your insurance company and you before financing your car. If the insurance company does not place your lender as first payee, the car won't be financed. Your lender is the first payee. Any money left is payable to you.
Scott H
The lender is listed as the "loss payee" on the insurance policy. This would mean that the lender is paid directly in a total loss settlement, and you would receive any excess proceeds.