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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?"
Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“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.”
View full answer
- Gregory R.
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