Title Loan Question

They want the insurance information because they want to put the ins co on notice that they are a lienholder. Lienholders get paid out of insurance proceeds before the named insured does.

The police report and estimate do them no good, they don't care about that. They want to get paid from the insurance company, which is why they want that info.

They can't do much to you if you don't provide the info. But there is a catch:

In a total loss, the insurance company will take your car and sell it to a salvage lot for scrap. THey need the title to do that. Therefore, the insurance company won't cut a check to you unless you can guarantee them the title. Since you don't have the title, you can't legally make that guarantee.

Conversely, if the insurance company trusts that you have the title, and they give you a blind check without title guarantee, they will be expecting you to mail them the title. When you don't, they will want their money back or they could sue you for it. Furthermore, if you had previously represented to the insurance company that you had a clear title in taking their check, it could be considered insurance fraud because you really don't have a clear title.

So you see the catch ... you do need the co-operation of the title loan place because they ultimately need to give up the title to the insurance company, or else the insurance company won't pay out the claim.

As much as you hate the title loan, they are going to have to get paid before they release the title to the insurance company. You may as well give them the info because the sooner they get paid, the sooner they stop charging interest. The longer this drags on, the higher your balance will get, and the less you'll see out of the insurance check.

I appreciate your follow up and recap. I will inform my insurance co. and the title loan co. tomorrow. I just hope and pray that the title loan mgr. will try and work with me and not make this difficult, or long and drawn out. Will they have to send a copy of the title to insurance to show that they are the lienholders and then insurance cuts them a check for my balalnce of $350.00? What do I do if they try and add more fees, or interest on the loan?

I can't see why the title loan would make it too difficult -- their goal is just to get paid. Making it difficult only keeps them from getting paid, especially when they don't have a car to repossess anymore.

Usually the insurance company will request a 10-day payoff letter from the finance company (just so the insurance co knows how much to pay). After finance co faxes back the payoff letter, then the insurance co will draft a title guarantee and fax to lender to sign (meaning the title loan agrees to send the title after receipt of $X.XX). Yes, the insurance co will usually request the lender to fax a copy of the title as well, so that they know the lender actually has the title.

After the insurance co receives title guarantee and copy of title from lender, then they will pay out the claim. They would cut a check to lender for the balance of that account; anything else they would pay to you (less your deductible).

If the title loan tries to add any fees or interest that they are not legally entitled to, then you can file a complaint with the State DFI. The state would usually investigate your complaint, and if the state finds the title loan over-charging they will get written up/fined/possibly lose their license and you get a refund for all those charges.

Most "legal" lenders are not willing to risk losing their license for a quick buck here-or-there. So the odds of them tacking on extra fees/interest are slim.

My son had a accident in his car. The insurance is in my name os the primary driver of his car. They told me they took out a title loan for the amount of 2500.00. Now what will happen.