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Question
If an insurance company pays a skip claim and then repossesses the vehicle, is the company repossessing on the basis of the security instrument (acting as a secured creditor) or had the company purchased the vehicle by virtue of paying the skip claim, extinguishing the security instrument? Essentially, would the insurance company be subject to UCC provisions when repossessing and selling the vehicle?

Answer
Kevin,

While I have never come across this kind of claim, there are a couple of basic issues involved.

A "skip" claim only applies if the collateral (car), borrower or co-maker cannot be located. I would think that if the company can locate the collateral, they could probably locate the creditor as well so it really would not be classified as a "skip" claim. The carrier "right" to the vehicle is based on the fact that they had "paid" for it under the insuring agreement. A lot will depend on the language of the actual forced place policy held by the bank and the language in the purchase contract signed by the original buyer. Generally, I do not believe the carrier would have a right to "repossess" the vehicle ... that right extends to the lender, who would then file a claim for damages to the collateral.

As to any UCC provisions that would apply, that is more of an area for an attorney who specializes in financial matters or a forensic CPA.  

Let me know if you find out any additional information ... this is an interesting scenario.

Kevin Hromas
JD, EGA, RPA, PLCS, HCRI-R/C, CPIU, WINDŽ Umpire
Kevin Hromas & Associates
... A Division of US Insurance Information LLC
www.KevinHromas.com  

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Kevin Hromas

Expertise

I am a licensed, executive general adjuster currently holding a Texas resident P&C license (614250), New Mexico non-resident all lines license (248774), Oklahoma non-resident P/F/M license (A299561), Florida non-resident P&C license (E117051) and a National Flood Insurance Program certification (06040100). My areas of expertise involve property and casualty issues in both residential and commercial policies with regards to claims practices and issues. I deal extensively with Lloyd's of London commercial policies and various domestic carriers for residential policies.

Experience

After a 20 year career as a General Contractor, I was employed by Allstate Insurance as an adjuster in Texas, holding various postitions within the property claims department. After leaving Allstate, I specialized in handling losses associated with major catastrophes through-out the country. (Hurricanes Isabel, Charlie, Wilma, Katrina, Ike, etc., hail storms, floods.) I am currently retained as an expert by multiple insurance defense firms in Texas for issues in litigation. I am also a certified Umpire for formal appraisals.

Organizations
Member - Society of Registered Professional Adjusters Fellow - Council on Litigation Management Member - Property and Casualty Association Member - Texas Independent Insurances Adjusters Association Member - National Association of independent Insurance Adjusters Member - Houston Claims Association

Publications
Claims Magazine (www.ClaimsMag.com and then search 'Kevin Hromas' for a full listing of articles and quotes.) www.ClaimsPages.com, www.ProAdjuster.org, www.KevinHromas.com

Education/Credentials
JD - University of Houston Law Center - 1992 BA - Southwest Texas State University - 1980 AA - South Plains College - 1977 PLCS - Personal Lines Coverage Specialist

Past/Present Clients
Certain Underwriters at Lloyd's, London, Fulbright & Jaworski (Law Firm), Bracket & Ellis (Law Firm) Thamm & O'Briant (Law Firm) Sheehy, Ware & Pappas (Law Firm) Walker, Wilcox and Matousek (Law Firm) Financial Guarantee Underwriters

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