my Insurance issued me a check for hail damage but I have a loan on the car ?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Aug 27, 2013

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Insurance Question from Omaha, NE

Asked on 08/27/2013

my Insurance issued me a check for hail damage but I have a loan on the car ? I was issued a check for hail damages, I took it to the auto body shop and the estimate they gave was over 75% of my cars value. the insurance says its totaled unless Ican find someone cheaper but wont issue me a check until I get the banks approval because there is a loan on my car. should they have issued me a check in the first place? does the estimate of a body hop hold water? and was my claim settled when I was issued a check?

Answer given on August 29, 2013

When your car is damaged by hail or similarly damaged, the insurance company will often make an estimate for the damages and issue a check to the car owner for the damages, even if there is a loan on the car.If you take your car to a repair shop and their estimate is higher, you then need to work with the insurance company for the additional funds. In your case, the damages are so high the insurance company is considering the car as a total loss. This changes the claim entirely.Since you have a loan on the car, the insurance company will not issue a revised check for a total loss without including the bank on the loan. You can try to find another repair shop who can do the repairs at the insurance company’s quote and then you can use the check issued by your insurance company. Otherwise, you will have your car totaled out and the check will be made out to the bank. If you owe more than that amount, or the same as the check amount, you will not receive any funds for your car, and you could owe the bank some additional money.

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