Can a lien holder file a claim after repossessing a vehicle?
"My car got repossessed and my lienholder filed a claim with my insurance. Are they allowed to do this?"
“Lienholders have a legal right to file a claim with your insurance after repossessing a car. When you list a lienholder on your car insurance policy, you’re letting your insurance know that another company has legal claim on the vehicle.
A lienholder is loaning you money to purchase a vehicle when you sign a finance agreement. Because they are loaning the money, they have an interest in what happens to the vehicle.
They most likely noticed damage on the vehicle when it was repossessed. To repair this damage, they are able to file a claim with your insurance to fix it.
If they don’t file a claim with your insurance, they could require you to pay for the damage out of pocket on top of the payments you already owe.”
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Read advice from car experts at Jerry
Browse by topics
What others are asking
Is paying $2,500 a year normal for car insurance?
"It seems like a lot to me. Is this what everyone else is paying?"
Jul 26, 2021
"Will my home insurance provide workers' compensation to independent contractors? "
I have a contractor over at my place almost daily because of some major renovations. I also have a nanny over a few days a week to look after my son. Will my home policy offer them workers' comp is something happens to them?
Apr 05, 2021
I haven't made a claim recently, so why did I just receive a check from State Farm?
"I'm confused about why they're sending me money when I'm supposed to be paying them. Did they overcharge me?"
Jul 26, 2021