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Car insurance question regarding who gets the claim check

My car was pretty severely damaged in a flood. (It needs a new engine among other things). My insurance company, however, is refusing to total it, and my mechanic has told me this is going to be a long drawn out process. I’ve already decided that even if the car is repaired, I won’t feel comfortable driving it, and I’ve started looking at new cars. The dealership has told me that I can just ask the insurance company to cut me a check for the estimate amount ($4000) and put that towards a new car. The dealership would then let me trade in my damaged car for an additional $500. What I want to make sure is that this is in fact legal. (If it helps, I own the car outright). I’ve tried getting in contact with my claims adjustor about this but she has yet to return my call. So do I need to brace myself for a long drawn out process or can I just cut my losses at this point and move on?

You really need to be talking to your insurance agent. The adjuster is contracted to insurance carrier and most times is not allowed to give information to anyone else. The check will be made out to you and who ever else is on the title plus the lien holder if there is one. If all else fails contact your state Insurance Commissioner.

Why would a dealer give you 500 for a flood damaged non-running vehicle that had to be towed.

The car is already at the dealer because that’s where it was originally
towed. I’m not sure why they offered me 500 on it. I’m simply repeating
what was told to me.

Sure it is legal. The insurance company is giving you money to fix your car. You can fix it and motor on or do as you plan, don’t fix it and buy another car. As far as the insurance company is concerned you have been ‘made whole’. They do not care what happens after you cash the check, they are off the hook. The dealer is giving you $500 as a courtesy discount, I have seen a lot of ads where the dealer offers $1,000 trade on any car, push it in tow it in etc. It is just a disguised discount that you would get anyway.

It’s legal, but you need to find out if the insurance company is willing.
If not, check with your state’s Attorney General’s Office of Consumer Protection and find out if the law requires them to be willing to do so. It might.
I recommend against going to the State Insurance Commission. That is an organization by, of, and for the insurance companies, there to protect them from consumers. It is NOT there to protect consumers from insurance companies.

It really depends on the insurance company. In a total, they will cut you the check or including any lien holders on the check. With a partial, some will just issue you the check and others will issue it to you and the body shop so both need to sign. In Minnesota, State Farm has their own preferred shops so if you use them you never see a check or even estimate. Its all done between the shop and SF. I gotta feeling though the insurance company will be happy to be rid of you for $4K and will gladly cut you the check.


Insurance companies do strange things. A friend of mine had a Ford Maverick that he hated. An ambulance swung too wide on a run and the back of the ambulance hit the rear of the Maverick. The ambulance driver quickly took the information and continued on to the hospital. When my friend was dealing with the insurance company, he asked for a check for the damage and told them he was going to get rid of the car and was already searching for a new car. The insurance company insisted that the Maverick be repaired. They rented a car for my friend while the Maverick was in the body shop. The repair took two weeks longer than the estimated time. When my friend got the call his Maverick was ready, he picked up the Maverick, turned in the rental and three hours later he had traded the Maverick for a new Honda Prelude. The insurance company would have been money ahead just to have paid for the damage to the Maverick.

Yeah they seem to want cars repaired rather than people pocketing the money.

I remember though in college, it was sleeting so the roads were ice. I was stopped at a stop light at the bottom of a hill and a girl ran into me. It was her first day with her license and her dad’s car. Broke my back up light bezel and pushed the fin of my 59 Pontiac in a little. Her insurance company paid me directly the $125 estimate. I fixed it for about $15 and put the rest to good use. This was when tuition was $425 a semester and my car cost $150. I would have hated to pay a body shop to do the work. This was South Dakota though where hand shakes are the same as a signature.

The check is NEVER EVER made out to the Leon holder. Only the person who owns the insurance policy.

Legally the insurance payment goes to the owner. Many times body shops have arrangements with the body shop where they get the check directly from the insurer.

How much do you own on the vehicle? Trading it in will be difficult if you owe much. If yo my didn’t have a loan you could take the insurance money and use that toward a new vehicle or just put it in the bank.

Maybe its different in New Hampshire. Its not clear if there is a lien involved in this car or not but in my experience the check requires endorsement by both the owner and the lien holder. They have a legal interest in the car or property and need to make sure their interest is protected. If there is a lien and their property is damaged, they have the responsibility to see that the property is properly repaired and their interest restored. In this case though I don’t think there is a lien.

Go Cubs

So you’re saying that when someone gets in zan accident they then have to go to their lien holder to get them to sign the check in order for them to get it fixed. If the check is made out to the lien holder and the car owner then BOTH signatures are required.

I’d love to see how that’s done with online banks. This isn’t just NH. Every state I know is do not require check made out to lien holder also.

Do you still owe money on the car? If so, you need to have the lien holder involved in this also.

You ask why would the dealer give you 500 dollars for a non-running vehicle that allegedly needs an engine.
The reason why is that they’re not really going to be giving you anything. It’s a smoke and mirrors numbers game.
A wholesaler will come around and pick the car up (maybe multiple cars) and will give them 500 for it.

Lien holder may be involved and notified. But that’s a far cry from being listed as one one the recipients on the check.

Like the others have said;
you can’t ask US for an answer to a question with a one-at-a-time unique circumstance answer.

recently, MY insurance company asked ME where to send the check.
Since I have no lien holder, would they write the check with the body shop name or mine ? mail it to me or them.
They let me determine the bookkeeping on this one.

When State Farm paid me for my roof, the check was written to me and Wells Fargo. It was no big deal. Just went down to the bank and they endorsed it and put it in my checking account. That was homeowners. When I totaled my Riv, the check was issued to me but there was no lien or body shop involved. When I had hail damage on my car, State Farm paid the body shop directly so I never even saw the invoice.

So takes your pick and talk to your agent about it. However, if a lien is involved, the insurance company has a legal responsibility to notify/indemnify/include the lien holder when there is diminished value on an insured property, real or personal. If you were the bank or lien holder, would you want less? In addition, if a body shop does work on the car (or a roofer on a house for that matter) and the check is issued to the individual, and the individual skips out, the body shop or roofer can put a mechanics lien on the property to recover their investment. That can really jumble things up. Too bad everybody isn’t honest in their dealings but it’s just good business practice for everyone involved. No lien, totaled car, no body shop-different matter.

Agree though, this is just so much chatter until you actually talk to your agent.

So how does that work for online banking. MOST mortgages are held by large companies like Citicorp. Mine is. So how would that work with me? There are no citicorp banks anywhere close to me. In rural areas in upstate ny or upper NH the closest Citicorp is well over a 4 hour drive.

Nope not buying it

Completely incorrect. How do I know? I am an insurance adjuster for the number one home and auto insurance company in customer service in the country. When there is a lien on the vehicle, you don’t own it.

Don’t buy that information if you don’t want, but you are wrong, plain and simple.

A very quick and easy google search will inform you.


So tell me…A person owns a home in Ogdensburg NY. Mortgage is held by Ciitcorp. When they make a claim, how are they suppose to get the check signed by Citicorp. Closest one is HOURS away. Double that during the winter.

How about Quicken Loans…Closest branch is NYC. That would be an 8 hour drive ONE WAY.

My brother-in-law has a brother and sister in Ogdensburg NY. Both have Citicorp loans.

I dunno but how would you make a deposit with a paper check? Seems to me you mail it to them, and you endorse it with a “for deposit only”. For cabin affairs we deal with a bank 200 miles away and that’s the way we handle it.

The only thing I would argue with is that you do own the car but a lien is a claim against it. This may vary in different states, but the owner holds the title but the lien holder is clearly identified on the title and can’t be sold until the lien holder signs off on it. In Minnesota anyway. Small difference maybe but the owner is the one liable. No a house under contract for deed is something different where you are contracting for the deed and don’t own it until the contract is fulfilled. A mortgage is different where you do own it but the bank would have a lien or an interest in it.

If they have a mortgage, they don’t own anything.

Again, type “insurance check to lien holder” into a thing called google, and within one whole second, you will have thousands of pages more patient to explain this simple concept to you.