Auto Insurance Claims: insured is not titled owner, fraud claim, cercone

Question
I had a relative lend me a vehicle which I carried insurance and registration on. the owner then borrowed the vehicle for a night. The car was then hit while parked that night causing $1900 worth of damage. We submitted a claim to our insurer (she does not have a policy) and received the check in our name. We doposited it in our account and are waiting for it to clear. Now she has called the insurance company saying we are committing fraud and the company has issued a stop payment and are investigating the fraud claim. Can this be seen as fraud? I have since found out after the fact that she is not allowed insurance do to her committing fraud. Where should we go from here? She wants to get the check issued in her name so that she can go on vacation.

Answer
The insurance company should consider issuing the check with both your names and let you guys work it out. And either the insurer or you folks will probably end up in court in a "Declaratory Relief" action, where the judge decides who gets the money. If I were the judge, I would say the car must be repaired, so nobody gets the money and all is as it was before the loss.

Ron Cercone
http://www.UClaim.com