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Home >> Checks/Money Orders >> Checks You Received
Insurance Check for Repairs Causes Problem
I have a check from an insurance company that has the dealership listed as payee for the repairs being done, and myself. The bank has a lien against vehicle. For whatever reason, the insurance company failed to put the bank on the check as lien holder. The dealership is willing to sign the check. Can the bank hold the check after it has been verified and disburse it to the repair shop? Whatever is left from repairs the bank says they can apply the rest to the loan without my consent.
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 If your loan payments are current and the car will be restored to its pre-accident condition, we aren't sure why the bank would be interested in the check, although as the lienholder, it does have an interest in seeing that the car is repaired to a condition at least as good as it was. The intent is never that you should find a cheaper body shop and pocket the difference, leaving the car in poor condition.
If you are getting the repairs done and the car will be back in shape, why bother depositing the check? Why not work with the dealership, endorse the check over in payment for the repairs, and accept the dealership's check in payment of any remaining funds? Dealerships generally do very good work, most often with original manufacturer parts, so your bank should be satisfied. If you feel you must get the bank involved in releasing the check, ask the insurance company to reissue the check adding the bank as payee.
Published on BankingQuestions.com 8/20/09
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