Legal Question in Insurance Law in New York

Auto Loans and Car Insurance

I recently had my car repossessed and before I turned it back to the bank, I had some damage due to backing into my house accidentally. I got a check from my auto insurance company which I cashed and never got the car fixed. I got a letter in the mail from my insurance company stating that I had to reimburse them because the bank contacted them and they issued a check to the bank for the damages I was already paid for. I know in New York I am entitled to keep the cash or get the car fixed. And when the bank sells the car I am responsible for the difference when they sell it at the auction as is. Can my insurance company come after me for the money, or do they have to get it back from the bank since the bank will collect on it through me as I am responsible for paying the difference ultimately? Please help me!


Asked on 11/05/07, 9:44 pm

1 Answer from Attorneys
Kevin Connolly Kevin J. Connolly

Re: Auto Loans and Car Insurance

Something went wrong. The insurance company should have issued a joint check to you and the bank. You still are obligated under your loan agreement to fix the car, since the insurance check is proceeds of the car on which the bank has a lien.

Count yourself lucky that you're dealing with the insurance company. If the insurer had stuck to its guns, and not paid, you likely would have a letter of inquiry from the County D.A.'s intake bureau, asking you to come in and discuss the larceny charges that were filed by the bank. The bank is not required to auction the car and chase you for a deficiency when they also have recourse to you for the insurance proceeds.

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Answered on 11/06/07, 9:16 am


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