After my car has been repossessed, can the lender make a claim against my insurance for body damage to the car?

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After my car has been repossessed, can the lender make a claim against my insurance for body damage to the car?

We relinquished a vehicle, and a couple of weeks later I received a notice from my insurance company that the lender was filing a claim against my insurance for some minor body damage to the car. Can they do that? I thought the car was to be sold “as is” at auction and if they can’t get the loan amount, they will come after us. How can they claim against our insurance, if they are selling the car “as is”?

Asked on August 6, 2012 under Bankruptcy Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

It is entirely possible in the realm of possibilities that the lender who repossessed the vehicle that you were not making payments on but was a presumed additional insured upon it can make a claim to the insurance carrier for the vehicle for repairs of assorted body damage to it. Whether or not the insurance carrier will accept the claim remains to be seen.


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