Today’s story will be of special interest to anyone who owns a vehicle that is financed — has a lien — and it is in an auto accident or otherwise sustains damage. If insurance is involved, who should the check be made payable to? What happens if the check is not made payable to the correct party?
What is a lien?
A lien on a car means a third party — usually a lender, known as a lienholder, such as a credit union or bank — has a legal interest in the vehicle. If there is a default on the loan, the lienholder could repossess the car. So, in effect, it is being rented from the lienholder, who owns it until the loan is paid and a lien release is issued.
Those questions were not even remotely on Brian Renninger’s mind in November 2023, when the retired correctional officer and his wife, Jeanne, were on U.S. Highway 70 in New Mexico between Ruidoso and Alamogordo when a large piece of Styrofoam flew off of a commercial truck in their lane.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
“There was no way to avoid driving over it. It hit everything underneath my Dodge Ram and fifth-wheel RV trailer, causing significant damage. The truck just drove off, the driver likely unaware of what had happened.”
Temporary repairs made for the drive home
Brian had adequate repairs done that enabled him to drive home, where he filed a claim with his auto insurance, USAA. The claims adjuster suggested using one of their shops, but “I took the fifth-wheel to Mike, a mechanic I had used for several years and considered a friend.”
Despite the fact that Brian’s insurance declaration sheet showed the RV to be financed by a credit union, the claims adjuster issued a check — $7,972.59 — payable to Mike and Brian, omitting the name of the credit union.
“I met Mike at his bank, where I signed the check, so he could buy parts. I asked if he needed the entire check for parts, and he replied, ‘This is walking-around money.’ Right then, I suspected something, but I said nothing, as I trusted him.”
One excuse after another
“Mike promised the vehicle would be repaired by January 2024. Then it was February, March, and finally in April, I get a text: ‘Had pneumonia. It will be done this Thursday.’ As expected, it wasn’t. My USAA adjuster said because I did not use their shop, they could not help. “I contacted every government agency I thought might help, but no one would (at first). Finally, the Bureau of Automotive Repair (BAR) — with whom I had filed a complaint — got serious when I called them. Mike had been unlicensed since 2015, and the BAR rep said they planned to shut him down. I went to Mike’s shop and took possession of my RV, which had sustained much more damage while in his possession.”
What should the claims adjuster have done?
Bob West, a retired Farmers Insurance claims adjuster, has such a positive attitude that “we’re going to get this resolved” could be stamped on his forehead. When I ran Brian’s situation by him, he immediately said, “The adjuster didn’t put the credit union’s name on the check? What? That set all of this in motion because they would not release funds until, most likely, the RV was repaired. A claims adjuster must protect the lienholder by listing them as a loss payee, or the insurance company might have to pay twice.”
If the claims adjuster suggests you use their preferred repair shop, ask for three names and check them out online, reading — first — the negative reviews. You are free to choose your own shop, but if things go south, the insurance company will likely decline to help, as they do not have to provide help.
Hats off to USAA: A happy ending
I contacted the media department at USAA, explained what had happened and asked them to look into this and help their insured. The next day, Brian sent me this email:
“On June 27, I received a phone call from a USAA fraud investigator and was told my case had garnered immense interest. He was having a meeting in about two hours with a USAA director to talk specifically about it. In all his years with them, this had never happened. Later the same day, I received a call from my new adjuster stating, ‘We will do everything that is needed to make this right for you.’ THANK YOU, USAA!
“Mr. Beaver, the moral to my story is to completely vet any repair facility before entrusting your vehicle to them. Are they licensed? Read the negative reviews and complaints before those that are positive. Always obtain a written estimate. Go with your gut feeling. Even if you have known the shop owner for years, things happen, people change. If things do not feel right, (go somewhere else).”
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
Related Content
- How to Beat Soaring Home and Auto Insurance Premiums
- Eight Ways Seniors Can Save on Car Insurance
- Why Has Your Car Insurance Gone Up? (And What You Can Do About It)
- If Cars With Touchscreens Are Unsafe at Any Speed, Why Do We Have Them?
- How to Deal With Property Insurance Claims After Storms
-
4 Money Habits Boomers Swore By That Millennials Are Walking Away FromMillennials are trading tradition for flexibility when it comes to building wealth.
-
Abu Dhabi Adventures: New Thrills, Iconic Sights and Disney’s Latest ParkDiscover the mix of culture, wildlife and modern marvels that make this Middle Eastern city a destination to watch.
-
How Much Do I Need to Retire? A Financial Professional Breaks Down Your OptionsWhat it all boils down to is will you be comfortable in retirement? Some people may rely on formulas, while others just aim for $1 million nest egg.
-
Despite Our Grumbles, America Still Delivers on the Dream: Perspective From a Financial Pro Who's Seen StuffSome of us might complain about the state of our nation (and those concerns are legit), but America still offers unparalleled opportunities and mobility that many people around the world only dream about.
-
When You Need Capital Quickly, Think 'Ready, Set, Fund': A Financial Adviser's StrategyInvestors must be able to free up cash to meet short-term needs from time to time. This strategy will help you access capital without derailing your long-term goals.
-
I'm an Estate Planner: Moving Family Assets to a Safe Haven Abroad Could Be a Huge Headache for Your HeirsIn troubled times like these, wealthy clients may seek financial refuge outside of the U.S. But that could cause more tax and estate problems than it solves.
-
Fall Is Tax Time? Yes! Act Now to Make Needed AdjustmentsReview your withholdings, contribute to tax-saving HSA and FSA accounts, manage a bonus' impact and adjust for major life events such as weddings and job changes.
-
Board Service in Retirement: The Best Time to Join a Board Is Before You RetireMany senior executives wait until retirement to take a seat on a corporate board. But making this career move early is a win-win for you and your current organization.
-
A Financial Professional's Take on Long-Term Care Insurance: Buy or Not?Unless you have about $6,000 burning a hole in your pocket every month, you should make a plan in case you need long-term care. Luckily, you have options.
-
How to Unearth Sustainable Investment in Mining: A Financial Professional's GuideMining is likely to play a critical role in the global transition to more environmentally friendly energy resources. Here's how you can balance the opportunities and the risks.
