Insurance claims when under finance!!

[J&C0508]

Just wondering for those who may know.

When you make a claim for a written off car and the car is still under finance, do they pay the finance company or do you pass the money on to the finance comp yourself??

tia

[subaruforestermum]

I would think it would be like any insurance claim, they would want the name of the company and pay them out directly... That's what happened when I had my accident, and they paid the repairer ($4000+) direct....

Maybe best to talk to your insurer though! Different companies may have different ways of doing things....

[ElizaDoLittle]

I'm 95% sure they pay the financer, which sucks because then u are held up going to get more finance to get another car :hair:

[Zoey]

When a friends car was written off they sent the cheque direct to her, and she then paid the finance company what was remaining. I'm assuming this is what generally happens, as the insuarance and finance are to separate contracts... do contact your insurance company & finance company to check the info, and see if there are any special conditions on the finance contract in regards to write offs and insurance.

Also, ask for a written pay out figure for the finance as soon as practicible, otherwise you may still be paying interest on the loan - a letter is much better than a verbal amount.

[stretch]

I worked in Insurance for 4 1/2 years. From past experience, (it depends on many things) but generally the Insurance Co will get in contact with the Finance Co (as its should be noted on your policy that there is a Financial 'intrest' in the vehicle.) The Insurance Co will payout the Finance Co - and IF there is anything left, you will get the balance. Also depends on what type of policy you have (Market Value or Agreed Value) if its Market - you will probably find that the Insurance Co will pay out the finance, and you will see nothing.

[megaminz]

depending on what state you are in it may be different but I know there is new legislation that has been passed where by insurance companies are obliged to do REVS checks against your vehicle which will show if there is any finance on it or if its "encumbered" regardless of whether you have stated this on your policy or not.

They will then pay out the finance company first and you any residual as technically you dont actually own the car til its unencumbered.