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Auto Insurance Claims/Finance Corp Taking DV Proceeds


I was involved in an accident June 2015 in GA.  Received a check for diminished value recently, to me and finance crp.They want to apply it to the balance and I don't.  My account is uptodate and never late.  Do I have the right to say no?  I looked at my contract and I do not see anything regarding diminished value.  The auto has been repaired.  

Thank You!


Thank you for your question.

I have yet to run into this and it indeed brings up an interesting question but one which I can only address in a non-legal manner as this will likely call for a clear reading and deciphering of your loan contract and perhaps state regulations...but here's what I can offer.

1. The lien holder is, for all practical purposes, still the owner of the vehicle in question simply because they have the title. While you have an agreement to buy it, and when paid for they will relinquish and transfer the title and ownership to you, currently they have a vested interest in the vehicle and have a duty to protect it until it is no longer theirs. So understandably, the lien holder is seeing this as their vehicle and as such, their DV monies since it compensates for the loss in their vehicle's value. The question remains...can they legally demand it and if so, what about the fees you invested in getting it!

2.I'm not sure if it was your insurer or the other party's which provided you the DV payment. Unlike most states, Georgia allows collection from either.

In some states, the insurer is mandated to include the lien holder on the payment for damage repair. This is to provide the lien holder the opportunity to ensure that their property has been repaired and that their vehicle and lien remains viable whereas, should it become necessary to repossess it, it has enough value to re-sell it and recover their loan balance. This keeps the buyer from using the insurance claim proceeds on other things and then failing to make their payments allowing the vehicle to be repossessed with damages placing the lien holder in a bad situation of being out of their money and nothing of value to sell to recover it.

3. Not knowing Georgia's regulations in this regard, I'm not sure if the state does mandate inclusion of the lien holder and if it applies to first party claim (where one makes a claim against their own insurer) and/or third-party claims (where one makes a claim against the at-fault party/insurer). You may be able to find this out from your lender or another bank, credit union etc. You may get it from the insurer themselves as a means to justify their placing the lien holder on the check.
If not mandated by state statues/regulations you may be able to compel the insurer to re-issue the DV payment in your name only.

In final, unless there is a contractual or statutory obligation to provide it, you may not legally have to give up the monies to the lien holder, however, making this determination may call for an attorney and you likely wouldn't want to make the investment of legal fees to find out when you may lose for the reasons I pointed out herein.

I would suggest you contact your loan officer and try to reason with them regarding your paying for the report and your making the effort to collect the DV $, your payment history and desire to keep the vehicle and pay it off etc. If they don't acquiesce and can show regulatory/legal justification for applying the funds, then allow them to apply the monies to your loan and enjoy the benefits of paying off the vehicle sooner and gaining/saving several payments.

Thank you for the question. Hope this helps in some way. If you would, let me know what you learn and what transpires as I am interested in what you may find and it may help others in the future.



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Barrett Smith


Auto Claim and Collision Repair issues including quality and thoroughness of repair, Diminished Value, Total Loss settlement valuation, Appraisal Clause matters, Expert Testimony, pre-purchase inspections and others. While having been a Senior Claims Adjuster, I am not licensed to practice law and cannot provide legal counsel. I will provide replies as friendly and informal advice based upon my experiences and those of our clients as possible. For more information on our offerings please visit For more informatin on our offerings please visit


I grew up working in a family owned auto body repair business my father owned and operated in Alaska and after leaving the US Air Force I started my own repair facility in Florida. I later became a senior claims adjuster for a national auto insurer and later managed two GM dealership collision centers. I started another shop which was recognized as a "Top Shop" in central Florida for over 15 years winning numerous local accolades and awards such as Business of the Year. In 2001 I developed Auto Damage Experts to provide its services nation wide and to all segments illustrating balance and equity for all ADE clients. For more information please visit

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