Legal Question in Insurance Law in Illinois

I was in a car accident and my bank cashed a check into my checking account that was made out to me and my auto body. Before any work could be done the car caught fire and was determined a total loss. (the fire was a second insurance claim) My lien holder obviously was informed about the loss and is now asking for the money from the first claim. Do I have to give it to them all at once or can I continue to make my payments?


Asked on 1/17/11, 10:35 am

1 Answer from Attorneys
Mark Hartzer

OK, the maximum the bank can recover is what is called the 'pay off amount'. Much will depend on whether or not you owe more than the value of the vehicle. On the 2nd claim, your insurer paid what would have been the current value of the vehicle. Obviously, a car with body damage is not worth as much as one without damage. Therefore, it is possible that your insurer did not pay full value on the 2nd loss since it had not yet been fully repaired. You need to find out the pay off amount if it is more than the amount of the check for the total. And yes, you need to pay off the bank if the vehicle no longer belongs to you and the bank. Unless you have retained the salvage, (doubtful), then the vehicle belongs to the insurer now.

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Answered on 2/02/11, 2:00 pm


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