I have a question about lapse of auto insurance?

Question

I have a 2004 Cadillac Escalade that I got in an accident with. The damage is $16,400 and there is $27,000 left on the payoff. I found out my insurance cancelled the month before because my debit card number on file changed, and I was out of town didnt get the notice etc. Doesnt the lienholder automatically put coverage on the car when they receive notice of insurance cancellation and isnt it retroactive to the day of the cancellation? And if so, do they just sell it wholesale as damaged and pay off the lien or is it actual comp and collision insurance and I may get the car back?

To answer some of the questions. Yes I did get a letter that they placed comp and collision on my premium payment. I am not in "default" as someone said, my payments are current and could easily pay off the $27,000 balance thats not a concern. California requires uninsured motorist coverage so the others are covered and they were both parked cars with nobody in them. So no liability. I already gave a check for $7,500 each and got a release. Im not worried about that. Im just curious if I should give the body shop a check tomorrow for $16,400 to fix it or if the comp and collision the lienholder put on will cover it.

Answer 1

you are solely responsible for the insurance.it may be sold then youd be responsible for the balace. you can buy the car back if the insurance company was involved BUT WITHOUT IT IM NOT SURE.

Answer 2

1

Answer 3

The insurance the lienholder puts on the vehicle is for their protection, not your's, for this very reason. Sorry, you are out of luck, however, with that much damage, the vehicle will likely be "totalled", by the insurance company. If this happens, you have to make the repairs, show receipts, have it inspected and pay for that, plus retitling of the vehicle. If the lienholder decides to sell it at the auction, they will not receive enough to pay off your loan, and you are responsible for the difference, even if you don't keep the car. If you carried "gap insurance", this problem would be solved, but you lapsed, so you have nothing but a wrecked car, a loan you are now in default on, and a liable suit coming your way from the lienholder. Good luck, you better get a lawyer.

Answer 4

Just because the lienholder may have had a policy out on the car does not absolve you from owing the balance of the loan.

The bottom line is that you owe $27,000 on the vehicle regardless of whether or not they had insurance.

If you don't have insurance on it...you'll still owe the money no matter what.

Now you just have to determine what you want to do with the car....you can pay the $16,400 to fix it and then continue to pay off the loan....

Or you can just junk it...take what you get....subtract that from the $27,000 and keep paying on that....while you go out and get another cheaper car.

Chalk this one up as one really hard and very expensive lesson in the school of hard knocks.

You knew the debit card number changed and you knew your insurance came out of that debit account.

It's totally your fault that you didn't contact your insurer to switch the number once you got it.

Answer 5

well have being in this almost exact situation in the pass what one needs to know is did the finance company send you a letter stating the fact that then received notice of uninsured veh and did they state in the letter that they were adding comp collision to your monthly payment if so u r then covered for the damage done on just your vehicle just as if you had bought it yourself, the car itself may still be totaled out but depending on the totaled out coverage and what they consider f.m.p.(fair market price ) would be paid out to fiance company any balance left (upside down) you would be then responsible for which since the car is already 3yrs old your most likely not upside down you might even have a check coming too you ....see a attny for a free consult on this one so that u get what u have coming 2 you ....fiancee comp's have been charging customers for yrs because of these lapse in policy's and getting rich , very few cases do they ever have actually cases that they ever take a loss on ...sounds like your one of the lucky people to benefit from the way they practice business

Answer 6

Sounds like you are up the creek without a paddle.

Lienholder is NOT required to have insurance, you are, and if there is insurance it would not cover you. It MAY cover in case you really messed up, like declare bankruptcy or something, but you still owe them money until then.

I am hoping it's not your fault in this problem, since if it IS your fault you have to pay for the OTHER party's damage too, if there is another party. Seems it will ALL be coming out of your own wallet.

Time to talk to them and negotiate a settlement.

Answer 7

A lien holder may have some kind of insurance on your vehicle, but it will solely be for their benefit not yours.

Unfortunately unless I am very much mistaken you still owe $27,000. You are either going to have to pay for the repair or scrap/sell the car. Any money you make from that will go against the debt you owe on it. You will then be liable for the rest of it.

Sorry for your bad luck. But you have to be really damn careful with things like insurance. If the accident had involved you injuring another person, your financial world would have been destroyed.

Answer 8

coverage is going with the motor vehicle, no longer with the motive force, so in case you're utilising your brother-in-regulation's motor vehicle mutually with his permission, you're coated. between the questions you're requested once you bypass to get coverage is "Are you presently coated?" If certain, no problem. If no, there will be an issue the position you would commence over at probable higher prices, except there turned right into a fantastic reason behind no longer having it. i'd guess that no longer having a motor vehicle will be a fantastically solid reason behind no longer having coverage. How lengthy will this is earlier you've a motor vehicle of your own? If this is only a short while, i'd likely leave this is and stay away from any confusion. If it will be over 6 months, i'd cancel and clarify why even as the time is composed of commence it back.

Answer 9

If the number changed because you changed accounts, and didn't pass the change on to the company, you are out of luck. If the lienholder put insurance on it, you will get a bill for that insurance, but, one can not count on the lienholder to look after you, lienholders look after themselves. We have clients that forget to tell us of account changes, then get mad at us when the insurance payment for their home or auto bounces, but I tell them we can only pass on information we are given. Ultimately, it is up to the policy holder to look after the financials of the account.

Answer 10

well you are responsible for the damage. you can pay it out of pocket or try scrapping it and using the money to recover the cost of the vehicle.

when financing a vehicle, you could run it into a ditch the next day and never drive it again for all they care, as long as you keep making the payments. they aren't going to come get the car unless you don't make the payments. they're not fixing anything or paying to fix anything.