The Rights of the Vehicle Lien Holder

My company is a lien-holder on the title to a vehicle. The client totaled the car and does not want to cooperate with the insurance company. We repossessed the vehicle for no payments, and now have a possession of the car. The insurance company does not want to look into the claim without the statement from the client(register owner of the car). What are our rights as a lien holder? N. Simkin, NB New Financial, USA


As the lien holder, you have an insurable interest in the repossessed vehicle. You have a right of recovery, or to be paid for the damage to the vehicle.

The insurance company may wish to investigate the damage claim to determine which coverage to apply (collision or non-collision, otherwise known as comprehensive coverage). The company will need to know how the damage was sustained to decide this.

The insurance company may also wish to know exactly when the damage occurred; it may have occurred on a date that they did not cover the vehicle because the policy was not in effect for some reason. There might have been a prior policy with a different company, or there may have been a lapse in coverage. If the same insurance company insured the vehicle the entire time that it was in possession of your client, then that issue could be moot, barring a lapse in coverage.

Since you indicate that you are with a financial company, you may have a legal department to call upon for help. If neither the client nor the insurance company want to play nicely, you may consider filing a lawsuit and naming both as defendants. That should get the ball rolling.

This article is approved for informational purposes only and is not intended to take the place of competent local legal counsel.

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