Auto Insurance Claims: Lienholder Demands to be Payee, auto insurance carrier, auto insurance coverage

Question
Let me premise my question by saying that in all my 34 years of driving, I have never been involved any kind of automobile accident.  Two months ago, I purchased a certified preowned vehicle from a Ford Dealership in California.  The dealership had to go to an outside lender in order to secure the loan for me to purchase the vehicle. (I was a victim of a fraud scheme several years ago and as a result was forced to filed bankruptcy)

As expected, I informed my auto insurance carrier of the changes that needed to be made to my policy, i.e. I now needed full coverage on the vehicle I had just purchase.  My insurance carrier listed AmeriCredit as the lienholder on my vehicle and I submitted the necessary documentation to AmeriCredit showing proof of the required coverage.

Yesterday, I received a letter from AmeriCredit stating that my insurance policy did not satisfy meet their requirements of the loan.  Please note, that at the time of the sale, the only thing that the Ford dealership required was proof that I did have auto insurance coverage.  The letter states that AmeriCredit must be named as the only "the payee" on my policy.  

This doesn't right to me.  Now, if AmeriCredit was actually providing the insurance coverage as well as making the monthly payments to my insurance company, then I wouldn't have a problem with them being named as the only "payee" on my policy.  However, since it is my hard earned money that is paying for the full collison and comprehensive coverage on this vehicle, not to mention the fact that I am also making monthly loan payments to AmeriCredit towards the purchase of this vehicle.  

My question to you is, can AmeriCredit rescind their loan, which is what they are threatening to do unless I change my insurance policy to reflect AmeriCredit as the "payee" on my policy?

Answer
Hi Julie,

I think you need to call the finance company to get clarification. They are to be listed on the policy as leinholder and "additional insured" or "additional payee".  They should not be listed as the only payee.

If there is a payable claim any checks issued would be payable to both you and the finance company.

I hope this helps
Richard Hixenbaugh