Do my lien holder get all of the insurance money?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 23, 2012

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Insurance Question from Columbus, OH

Asked on 02/23/2012

Do my lien holder get all of the insurance money? If a settlement is made and the insurance company will pay the car value and Gap insurance gets pays the rest. What do I get? Does the check go directly to the lien holder?

Answer given on March 01, 2012

I am presuming that your car was a total loss due to an accident. If so, then the settlement check will probably be made out to you and the lender. If the gap coverage applies, then the loan will be considered settled once the lender gets the payment from the insurance company and the gap insurance company. If there is any money left over, such as for medical payments or rental car, then you will be reimbursed that amount.Unfortunately, if you recently bought the car, there is probably little left in the settlement for you. However, your lender may be willing to give you a good rate on a new car since your insurance settled the amount that they were due. Talk to the lender to see what they will do for you since the claim settled with full payment to them.

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