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Auto Insurance Check Law

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oooo35806

Junior Member
What is the name of your state? Alabama

About a year ago I was involved in an accident. A 15 Year old kid with no license or insurance rear ended me, forcing me into another vehicle. It was ruled his fault and my insurance company is in the process of collecting from him. I have full coverage, but the bare minimum, with a 1k deductible, and I owe about 21k on the car still. The damage was 4k and the insurance check was 3k,. Two days after the accident I was layed off from work, my unemployment check covered household bills but not my car payment. To keep from having to let the car go back I cashed the insurance check (The body shop guy was a friend of mine and had to sign it before I could cash it.). I used the insurance money to pay the car payment for several months until I found another job and could pay my bills again. Now I'm enlisting in the Navy and and I can't figure out what to do with the car, I don't know if what I did was legal or not so I don't want to ask my insurance or finance company and end up in some sort of trouble, I could keep paying on the car but I'd really like to go into the Navy with no loose ends.

If I let the car go back will I only be liable for the amount I owe on the car minus what it's worth regardless of condition? Should I just sell it and pay that to the finance company, or is that legal? Was cashing the check illegal to begin with?What is the name of your state?
 


ecmst12

Senior Member
Technically not legal but if all you did with the money was use it to pay your car payment, it's basically ok. The reason is because insurance money can go to 2 places - either to fix your car, or to pay your leinholder.

You can't just "let the car go back"; that will be bad for your credit and the military doesn't like that. You can keep the car and keep making the payments, or sell it and hope you get enough to pay off the loan.
 

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