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Finance Company as Lien Holder & Insurance Company
(Los Angeles, CA )
We are a auto finance company. The insured involved in an accident and the subject automobile declared total loss. Apparently, the insurance coverage was in lapse for 2 days (due to none payment of premium) and insurance denied the claim. Do they have the right not to pay
to the lien holder? Appreciate your advise...
Well, that's some bad news right there. Usually, the duty to protect the line holder is triggered only to the condition preceding of payment of premium.
Sounds like there was a lapse and simply not a late payment. This can give you a headache. In some states, the insurance company must notify and give time to cure to the insured and the line holder. In some other states, the notice only goes to the insured. We are not sure what California does.
You will have to consult with a local lawyer about that.
I hope this helps,
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