Expert: Bennie719 - 4/25/2008

Question
My husband was just recently in an auto accident where the vehicle is pretty much totaled. The insurance company has not determined this yet. The problem is this vehicle was purchased by my husband from his father. My father in law paid off the vehicle prior to selling it to us. Just after we purchased the vehicle, my father in law took out a loan to go on vacation and do some house repairs, he took a lean out on the vehicle he just sold us. The auto is still in my father in laws name. The insurance we have on the vehicle is in our names. If the auto is determined to be totaled, will the insurance company pay off the lean or is it possible to have the amount paid to us? Without this money, we might not be able to afford another vehicle which my husband needs for work. If the lean is paid off, the chances of my father in law paying us the amount back isn't very good. Please give me some advise on how to handle this if possible.

Answer
Hi Cecilia,
I'm sorry to learn of your predicament.
If the car is totaled, the insurance has no choice but pay off the lien first.
Any remaining money due will be paid by check to your father-in-law, since he is the registered owner of the car.

At the time of final settlement, your father-in-law will have to sign all the legal documents on the car over to the insurance company.

You and your husband should plan to be with him at that time so he can sign and hand the check to you.  If he cashes it, you may never see a penny.

I hope this information has been of help.
Your feedback by rating my answer will be appreciated.

Sincerely,
Bennie
San Francisco Bay Area