Quick Pseudo Legal Advice

[Tck13]

About 2 weeks ago someone hit a couple of cars and ran over my motorcycle in front of my apartment. I saw him hit my bike. His insurance company has taken 100% responsibility. They have issued me a check (almost the next day) and I need to get my bike fixed.

I went to the bank to deposit the check (which was written in my name only) and the teller asked me if it was an insurance check and if it was for my motorcycle. Not thinking, I said yes and all of a sudden she was on the phone.

She told me to go to the loan department and they would take care of me there.

I went to the loan department and the lady thanked me for the check and said she would hold it "escrow" until I provided a receipt for the bike being fixed. I told her that she could not do that since it was not a check from MY insurance and it had nothing to do with my (her/our) bank. She said that I couldn't have the check and since they were the lean holder they HAD to make sure the bike was fixed.

They also told me that if the repairs were less than the check that I would get that money back and if the repairs were more I'd have to pay for it out of my pocket???!?!?!?! WTF????

I'm going in tomorrow and demanding my money since it was a check addressed to me, from a third party, and it's really none of their business who the check was from. Also, I'm not sure how anyone can take my check (made out only to me) and put it into escrow. Sounds criminal to me.

Thoughts?

 

[kwilkinson]

Did you read the back of the check? For all of our cargo claims (trucking industry) we put a stamp that says "Endorsement constitutes full and final release of any and all claims."

It sounds really odd that the other person's insurance company could put your bank as the lienholder on a check though. If she was being honest about the bank somehow being the lienholder, then she is exactly right that she does not have to release the funds until you prove the bike has been fixed.

Anyway, I'm not a lawyer, but I do work in an insurance-related environment. If the check doesn't cover the full costs and you signed a check that has a statement at the top like the one I've started implementing, then you're kinda screwed.

It seems like the company is trying to give you the short stick here though. I mean, how did they come to that amount without having an estimate or anything? I think you should get 2-3 estimates for the work done and then compare that to the check amount. If it seems like they're hugely different, then send the estimates to the insurance company and tell them that they need to send you a more fitting amoutn.


Good luck.

 

[Tck13]

Originally Posted by kwilkinson

Did you read the back of the check? For all of our cargo claims (trucking industry) we put a stamp that says "Endorsement constitutes full and final release of any and all claims." It sounds really odd that the other person's insurance company could put your bank as the lienholder on a check though.
I think that's what I'm saying. If it was MY insurance company that was paying then they would make the check out to my bank (lienholder) and me and my bank could say it was their check to hold on to. That's fine. This check from the OTHER insurance company was made out to me only and my bank took it from me.

Originally Posted by kwilkinson

Anyway, I'm not a lawyer, but I do work in an insurance-related environment. If the check doesn't cover the full costs and you signed a check that has a statement at the top like the one I've started implementing, then you're kinda screwed. It seems like the company is trying to give you the short stick here though. I mean, how did they come to that amount without having an estimate or anything? I think you should get 2-3 estimates for the work done and then compare that to the check amount. If it seems like they're hugely different, then send the estimates to the insurance company and tell them that they need to send you a more fitting amoutn. Good luck.
The only name on the check anywhere is my own name. I did sign the back because it's my check and I was trying to cash it. Also, the insurance guy came out very quickly, we looked it over, and he contacted the dealership I was going to take it to and got prices. He said that after they look at the bike that if it was a higher price they would contact him (or I would) and he would check what they were going to do. If it needed to be fixed they would pay for it. He didn't have a problem with that. He said that it's always possible that there's more damage that one can't see.

 

[Dakota rube]

Why are you surprised that a lien-holder wants to make sure the property they have an interest in is repaired? I don't understand why you'd even question their action.

 

[Pedantic Turkey]

They might be right that you're supposed to put the check in escrow and all that.

But I tend to doubt that they can basically snatch it out of your personal checking account like that.

 

[kwilkinson]

They can't legally take it out of his account. By out of pocket he just means he'd have to write them a check for whatever overage there was.

I still don't understand one thing though... did you tell the insurance adjustor who your bank was? I don't get why they'd make them the lienholder...

 

[Pedantic Turkey]

What I mean is that he had a check addressed to him, personally, that he tried to deposit in the bank in its capacity as custodian of his personal checking account.

The bank basically switched hats to lien holder and self-helped itself to his check. Can it do that? I don't know, it's not my area of expertise.

 

[Tck13]

Originally Posted by Dakota rube

Why are you surprised that a lien-holder wants to make sure the property they have an interest in is repaired? I don't understand why you'd even question their action.
It was a check made out to me (personally) by someone else's insurance company. Why does my bank even need to know about that? From what the insurance company told me, if it was going through MY insurance company, then the bank would do what they did. But not through someone else's insurance company. It's like you writing me a check because you opened your door and dented my door in a parking lot. I take the check to the bank and they take it in escrow until I fix my door. It's none of their business if you write me a check for something even if it damaged the car that they own. If we went through MY insurance (or it was my fault), then the bank can say we want the door fixed and you need to do it.

Originally Posted by kwilkinson

They can't legally take it out of his account. By out of pocket he just means he'd have to write them a check for whatever overage there was. I still don't understand one thing though... did you tell the insurance adjustor who your bank was? I don't get why they'd make them the lienholder...
They took the check out of my hands and said, "Thanks, we'll put this in escrow". The insurance adjuster has no / had no idea who my bank was. The teller, when I went to cash the check asked me what the check was for since it had an insurance companies name on it.

 

[Dakota rube]

Originally Posted by Tck13

It was a check made out to me (personally) by someone else's insurance company. Why does my bank even need to know about that? From what the insurance company told me, if it was going through MY insurance company, then the bank would do what they did. But not through someone else's insurance company. It's like you writing me a check because you opened your door and dented my door in a parking lot. I take the check to the bank and they take it in escrow until I fix my door. It's none of their business if you write me a check for something even if it damaged the car that they own.

If we went through MY insurance (or it was my fault), then the bank can say we want the door fixed and you need to do it.
Your bank holds the lien on your bike, right?

It doesn't matter where the hell the check comes from or where it is going. A piece of property secured by a note has been damaged, thereby lessening its residual value. The lienholder has a right to see that any money you've been paid to repair that secured property is used to do just that.

I honestly don't see how you think there is a difference in which insurance company paid the claim. That's immaterial. When you signed the note, you agreed to keep the bike insured and in good repair. Your bank is just helping you comply with that contractual obligation.

 

[kwilkinson]

Originally Posted by Dakota rube

Your bank holds the lien on your bike, right?

It doesn't matter where the hell the check comes from or where it is going. A piece of property secured by a note has been damaged, thereby lessening its residual value. The lienholder has a right to see that any money you've been paid to repair that secured property is used to do just that.

I honestly don't see how you think there is a difference in which insurance company paid the claim. That's immaterial. When you signed the note, you agreed to keep the bike insured and in good repair. Your bank is just helping you comply with that contractual obligation.

Unless the bike is paid off. Then it's definitely odd.

 

[Pedantic Turkey]

Usually you assert your rights in court, not by grabbing a check out of somebody's hand under false pretenses and refusing to give it back.

I know self-help is allowed in some cases, but I don't think this is one of them. Is it?

 

[dopey]

Why don't you look at your loan documents with the bank. It probably has a section that describes what happens with insurance proceeds relating to their collateral. It probably also gives them an express lien on the insurance proceeds.

 

[awcollin]

Originally Posted by dopey

Why don't you look at your loan documents with the bank. It probably has a section that describes what happens with insurance proceeds relating to their collateral. It probably also gives them an express lien on the insurance proceeds.

Or any monies in a checking account you have with them.

 

[Tck13]

In conclusion:

I went to the bank today to discuss what happened. They were very nice and said that normally checks aren't issued only to the person getting accident damage fixed and she said that my point of view was understandable.

She said she would split the money with me. She gave me half and kept the other half in escrow. She said she'd prefer that I replaced the other half when the bike was fixed and I agreed to do that. I love my Credit Union! It's nice to deal with people at a small institution instead of strangers on the phone... Doesn't that make you feel warm and fuzzy inside?

 

[DNW]

Originally Posted by Tck13

In conclusion:

I went to the bank today to discuss what happened. They were very nice and said that normally checks aren't issued only to the person getting accident damage fixed and she said that my point of view was understandable.

She said she would split the money with me. She gave me half and kept the other half in escrow. She said she'd prefer that I replaced the other half when the bike was fixed and I agreed to do that. I love my Credit Union! It's nice to deal with people at a small institution instead of strangers on the phone... Doesn't that make you feel warm and fuzzy inside?

Did you two hug it out?