Auto Insurance Claims: Vehicle insured by a non-owner, insurance question, legal obligation

Question
QUESTION: I am the lein holder on a commercial truck.  The registered owner entered into a contract to lease it to a 3rd party company, who has agreed to pay the monthly payments, repairs, and insurance while using the vehicle.  While the 3rd party company was using the vehicle, they totalled it.  Their insurance has valued the vehicle at $10,000 more than is owed to me (the leinholder).  The registered owner claims the excess is his, because he is the owner.  The 3rd party company claims the money is theirs, because they were paying the premiums.  The insurance company is not stating any position, but seems to be favoring their customer (the insured 3rd party).  Can the insurance company pay the 3rd party without paying me (the leinholder)?   Who has legal right to the exess?

ANSWER: Hi Harold,

The third party who totaled the truck was essentially just renting the truck. The purchased insurance to protect the titled owner and the lienholders interests in the truck.

In this case you should assert a claim as the lienholder of the vehicle and you should be paid first. Any remaining balance should be paid to the titled owner of the truck. The third party that was leasing the truck gets nothing.

I hope this helps
Richard Hixenbaugh

---------- FOLLOW-UP ----------

QUESTION: Thank you for your previous expert advice.  There has been a new development and I have a follow-up question:  The insurance company has sided with their insured, and denies any legal obligation to me (the leinholder) because the insurance policy does not have my name as a payee.  They are going to pay their insured for nearly the full value of my truck, which he destroyed, pay me nothing, and leave me with the title for the destroyed vehicle.  Clearly, the insurance company intends for me to sue their client to recover the value of my truck.  Though this might become a legal question, I have an insurance question:  Can an insurance company ignore the claim of a leinholder that they know exists?

Answer
Hi Harold,

Yes. The insurance company is only obligated to the leinholder if they are listed on the policy as such. It looks like you will have to sue both the person you sold the vehicle to as well as the person he rented the truck to.

I hope this helps
Richard Hixenbaugh