Subrogation Claim

[janeyal]

California. I sold a truck in February 2007. I filed a release of liability with DMV. In April I received a letter from Progressive Insurance stating that our vehicle had been in an accident and asking for our insurance info. I called the representative whose name was on the letter. She said that they knew I didn't own the truck anymore because DMV had the release of liability, but they needed the name of the person I sold it to. I gave her this info and she said it was all taken care of. The buyer apparently never registered the truck in his name.

Now today I received a letter from a debt collector (Insurex, Inc.) trying to collect a subrogation claim for this same accident. Progressive Insurance knows the truck was sold and knows there was a release of liability filed with DMV so how can they try to collect from me? What should I do next? Should I send a validation letter to the collector? Thanks for any help.

[moburkes]

It sounds like, besides the release of liability, you are also responsible for a few more things:


Requirements after selling a vehicle.

When selling a California registered vehicle, the registered owner of record must:

Release ownership by signing on line one of the title.
If the vehicle is, or was financed, the lienholder’s name appears in the legal owner section and their release with counter signature is required on line two.
Provide the purchaser with evidence of a valid smog certification, if applicable.
Smog certificates are good for 90 days from the date of inspection. The smog certification is not required if the owner or buyer signs a statement that smog certification was submitted with renewal fees within 90 days prior to the transfer date (a vehicle inspection report may be required for proof of certification).

Recent legislation changed the requirements for vehicle transfers occurring on or after January 1, 2005. When you transfer a vehicle that is four or less model years old a smog certification will not be required. A smog transfer fee will be collected from the new owner. When a vehicle is more than four model years old, evidence of a current smog certification must be provided by a seller except when the following occurs:
The transfer occurs between a spouse, sibling, child, parent, grandparent, or grandchild.
A biennial smog certification was submitted to DMV within 90 days prior to the vehicle transfer date (a vehicle inspection report may be required for proof of certification).
Provide the odometer mileage if the vehicle is less than 10 years old (Vehicle/Vessel Transfer and Reassignment Form, REG 262). If the title does not have a designated space for this information, a REG 262 reporting the odometer mileage must be signed by both the seller and buyer. The REG 262 cannot be copied. An original must be submitted. To obtain a form by mail, call DMV's automated phone service 24 hours a day, 7 days a week at 1-800-777-0133. To speak to an operator call between the hours of 8 a.m. and 5 p.m. Monday - Friday, Pacific Standard Time, or pick one up from your local DMV.
Protect Your Liability. Complete a Notice of Transfer and Release of Liability. The seller is responsible for reporting the change of ownership to DMV within 5 days from the date of sale. After DMV updates the information from the Notice of Transfer and Release of Liability, you will be cleared from future liability on the vehicle. The purchaser is responsible for reporting the change of ownership to DMV within 10 days from the date of purchase.

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Did you also do the above?

[janeyal]

Thank you for your quick response. The truck was a 1970 model so did not have to be smogged. I did file the release of liability within the five-day period. I did comply with all the requirements. The buyer never registered in his name. Progressive Insurance knows this because they contacted DMV and were told that we were no longer liable. I can't understand how they can pursue this knowing I am not liable.

[moburkes]

I work in insurance. Hopefully, someone will be by (tranquility) to help you get this fixed.

[Chien]

Do you have copies of your title transfer and liability release? If so, send copies, along with a letter informing the CA that the information is erroneous and disputed. Tell them that you had been contacted by Progressive post-sale and their client was aware of the apparent error long ago. (If you can tell them when and with whom the prior conversation took place, all the better.)
The CA is acting for the original creditor and the FDCPA doesn’t apply. Calif.'s version, the Rosenthal Act, covers original creditors, but this situation is not regarded as a “consumer debt” under either Act.
Simply tell them to confirm their information with their client because, if they don’t correct their files and discontinue calling, a “deceptive practices” complaint will be lodged with the State Attorney General.

[janeyal]

Thank you Chien and Moburkes for the info. I do have copies of the liability release and I will do as you suggested Chien.

[tranquility]

Who is your insurance company? When did the accident occur?

[janeyal]

The release of liability is dated 2-14-07. The accident occurred on 4-9-07. My insurance company is Mercury, however, we dropped the insurance on this vehicle about two weeks after it was sold.