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?"

Answer
“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.”
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Emily Maracle
Answered on Jul 26, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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