What can I do if I had my car totaled last week but the insurance company is only writing a check for half the amount I owed on my loan?

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What can I do if I had my car totaled last week but the insurance company is only writing a check for half the amount I owed on my loan?

The insurance company that holds my GAP insurance sent me a letter stating they will pay the other half once the check clears from the insurance company (minus the GAP premium). However, the lienholder of my car loan is saying I have to make a payment today but the entire amount of my loan is already being covered by both of my insurance carriers. Is this legal?

Asked on January 28, 2015 under Insurance Law, Oregon

Answers:

Anne Brady / Law Office of Anne Brady

Answered 6 years ago | Contributor

Yes, it is legal for your lender to require that timely payments be made on your car.  If the payments by the two insurance carriers wind up being more than you owe on the car, you will get any overpayment refunded to you.  Just because money is on the way does not mean your lender has to wait for it to arrive when a payment is due now.


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