July 26, 2024 • By Dennis Beaver
Today’s story will be of special interest to anyone who owns a vehicle that is financed, has a lien, that is in an auto accident or sustains damage due to some other cause.
If insurance is involved, who should the check be made payable to? What happens if it is not?
What is a Lien?
A lien on a car means a third party — usually a lender, known as a lienholder, such as a credit union or bank — has a legal interest in the vehicle. If there is a default on the loan, the lienholder could repossess it.
So, in effect, the car is being rented from the lienholder who owns it until the loan is paid and a lien release is issued.
Those questions were not even remotely on Brian Renninger’s mind in November 2023, when the retired correctional officer and his wife, Jeanne were on Highway 70 between Ruidoso and Alamogordo, New Mexico, when a large piece of Styrofoam flew off of a commercial truck in their lane.
“There was no way to avoid driving over it. It hit everything underneath my Dodge Ram and 5th wheel, RV trailer causing significant damage. The truck just drove off, the driver likely unaware of what had happened.”
Temporary Repairs Made on the Drive Home
Brian had adequate repairs done that enabled driving back home and filed a claim with his auto insurance, USAA. The claim adjuster suggested using one of their shops, but “I took the 5th-wheel to Mike, a mechanic I had used for several years and considered a friend.”
Repair Check Issued to Mike and Brian
Despite the fact that Brian’s insurance declaration sheet showed the RV to be financed by a credit union, the USAA adjuster issued a check for $7,972.59, payable to Mike and Brian alone, omitting the name of the credit union.
“I met Mike at his bank where I signed the check, so he could buy parts. I asked if he needed the entire check for parts, and he replied, ‘This is walking around money.’ Right then I suspected something, but said nothing as I trusted him.”
One Excuse after Another
Mike promised the vehicle would be repaired by January 2024. Then it was February, March, and finally April I get a text, “Had pneumonia. It will be done this Thursday.”
As expected, it wasn’t.
“My USAA adjuster said because I did not use their shop, they could not help. I contacted every government agency I thought might help, but no one would. Finally the Bureau of Automotive Repair, with whom I had filed a complaint, got serious when you called them.
“Mike had been unlicensed since 2015, and the BAR rep said they planned to shut him down. I went to his shop and took possession of my RV which had sustained much more damage while in his possession.”
What Should the USAA Adjuster Have Done?
Bob West is a retired Farmers Insurance claims adjuster who has such a positive attitude that “we’re going to get this resolved” could be stamped on his forehead. When I ran Brian’s situation by him, he immediately said, “The adjuster didn’t put the credit union’s name on the check? What? That set all of this in motion, because they would not release funds until, most likely, the RV was repaired.
“A claims adjuster must protect the lienholder by listing them as a loss payee or the insurance company might have to pay twice.”
Should you Use the Company’s Preferred Shop?
If the claims adjuster suggests their preferred repair shop, ask for three names and check them out online, reading the negative reviews first. You are free choose your own shop, but if things go south, the insurance company will likely decline any help as they do not have to.
Hats Off to USAA
I contacted the Media Department at USAA, explained what had happened and asked them to look into this and help their insured.
The next day, Brian sent me this email:
“On June 27, I received a phone call from a USAA fraud investigator and was told my case had garnered immense interest. He was having a meeting in about two hours with a USAA director to talk specifically about it. In all his years with them, this had never happened.
“Later the same day, I received a call from my new adjuster stating, ‘We will do everything that is needed to make this right for you.’ THANK YOU USAA!
“Mr. Beaver, the moral to my story is to completely vet any repair facility before entrusting your vehicle to them. Are they licensed? Read the negative reviews and complaints before those that are positive. Always obtain a written estimate. Go with your gut feeling. If things do not feel right, even if you have known the shop owner for years, things happen, people change.”
Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.