What can happen if I spend the auto insurance settlement money that's supposed go to my lienholder?
The entire amount of my insurance settlement was deposited into my bank account instead of going to my lienholder. I was owed a portion of it, but I'm wondering what would happen if I just spent it. I could really use the money right now.
Answer provided by
Answered on May 07, 2021
“While your car insurance company might have made an error in depositing the money into your account, you should not spend what you’re not entitled to. You’ll want to reach out to your lienholder and let them know about the mistake. You’ll also want to let your insurance company know.
Since the lienholder was expecting the money, you would face consequences for spending it. This means they could require you to pay the loan off in full immediately, or they could take legal action.
Once the insurance company is aware of the error, the deposit will either be reversed completely or they will withdraw the amount owed to the lienholder. While this is getting sorted out, you’ll want to make sure that you’re still making your loan payments on time, if due. “
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.
Browse by topics
What others are asking
Can a minor sue her stepparent’s home insurance for injuries?
"My 16-year-old niece slipped on a wet floor in her stepmom's home (my niece lives elsewhere). She sprained her foot, needed stitches, and could barely move for a while. She wants to know if she can sue her stepmom's homeowners insurance to cover her injuries. "
Apr 07, 2021
How long does it take to add another person to your car insurance?
My dad wants to add me to his car insurance policy. I'm 17 years old and I plan to keep living with him for the next few years. How long will it take?
Apr 12, 2021