Why does my insurance need me to sign a power of attorney for my totaled car?

"My insurance said I have to sign the power of attorney before I'll be paid the value of the vehicle. Is this normal? Do I need a lawyer?"

Answer provided by
Emily Maracle
Answered on Jul 27, 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.
“It’s completely normal for a car insurance company to ask for power of attorney. When your vehicle is totaled, your car insurance company gains ownership once the actual cash value is paid out.
Since the title is in your name, the power of attorney allows the insurance company to act on your behalf until the title transfer is complete. If a power of attorney isn’t signed, your insurance company would need your signature or permission to fill out any forms regarding the vehicle.
This would be incredibly time consuming and could prevent you from being paid as quickly as possible. Signing the power of attorney before you’re paid out doesn’t mean you won’t be paid.
If you are uncomfortable with the language in the power of attorney, you can have a lawyer review the document. They’ll be able to answer any questions you may have.”

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