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Vehicle totalled. Buyer's, or Seller's, insurance company liable?

Discussion in 'Automobile & Car Insurance' started by te2243, Sep 11, 2017.

  1. te2243

    te2243 Law Topic Starter New Member

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    Jurisdiction:
    New York
    NY Buyer obtains a vehicle with a signed, witnessed, bill of sale and issues payment in the form of a bank check sent directly to the lien holder on the title. Two weeks later, the buyer totals the unregistered vehicle on a private NY road. Three weeks after the date of sale, the PA seller has not yet provided a signed PA title, as the lienholder needed to be removed. Is the insurance company of the Buyer, or the Seller, responsible? Thank you
     
    Last edited: Sep 11, 2017
  2. adjusterjack

    adjusterjack Super Moderator

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    Why would the buyer be STUPID enough to turn over the money and take possession without getting the title on the spot.

    If the buyer wasn't STUPID, this question would never arise.
     
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  3. te2243

    te2243 Law Topic Starter New Member

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    No need for insults. The title has a lien on it that needed to be removed. The Buyer is protected in the event that the title is not provided to the Buyer within 60 days of the transaction: eBay's buyer protection program will refund the Buyer.
     
    Last edited: Sep 11, 2017
  4. army judge

    army judge Super Moderator

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    You might discuss this with a lawyer licensed in the state where you reside.

    eBay often disappoints people in your position.

    You can search this (and other legal forums) to prove it to yourself.

    That said, if there is any liability it is against the person who sold you the vehicle.

    However, a search of this and other forums often reveals that you were dealing with a scammer hiding behind CrooksList or ePayThemNotYou.

    Legally one can't sell that which she doesn't own.

    However, that is precisely what scammers do.

    I wish you well.
     
  5. te2243

    te2243 Law Topic Starter New Member

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    Your answer is appreciated. Please clarify: the legal ownership, on the date of the accident, is determined by the title, not the bill of sale? Thank you,
     
    Last edited: Sep 11, 2017
  6. army judge

    army judge Super Moderator

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    Now, that isn't a yes or no answer.

    The title is alleged to be encumbered by a lien.

    If that is true, the seller wasn't authorized to sell it LEGALLY.

    Could you sell your home if a lender held a mortgage against it?

    For all you know today, the seller may not have owned the vehicle.

    BTW, that's usually how this scam works.

    First of all, do you know the alleged title to be valid?

    The bill of sale can prove it was sold to you.

    However, as you've found out, the vehicle has a lien against it.

    What would possess anyone to sell a vehicle with a lien against it, or a house with a lien on the deed?

    One thing, and one thing ONLY, the "seller" is also a scammer.

    I suggest you run the VIN against one or two of the many online and/or apps that provide you with information of vehicles via the VIN.

    You can also see what the "seller's/aka/scammer's" motor vehicle agency has to say about the matter, or even your state's agency.

    I suggest you gather as many facts as you can before you plead your case to the lealized SCAMMERS that run eBay.
     
  7. adjusterjack

    adjusterjack Super Moderator

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    You were asking about an insurance issue, not a title issue.

    The insurable interest passes to the buyer when the money changes hands and the buyer takes possession.

    The seller's insurance would be right to deny any claim that arose after that date regardless of the title status.

    So I take back the stupid label with regard to the title, but if the buyer didn't insure his vehicle on the day he paid for it and took possession, then the label goes right back on him.
     
  8. Highwayman

    Highwayman Well-Known Member

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    Operating an unregistered vehicle on a private road? If the "private road" was open to public motor vehicle traffic then it's considered a "public highway" and the vehicle needed to be registered AND insured.
     
  9. te2243

    te2243 Law Topic Starter New Member

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    Of course. A private road, on private land. Not a public road.
     
    Last edited: Sep 11, 2017
  10. te2243

    te2243 Law Topic Starter New Member

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    1) For the purposes of this discussion, let's assume that the Seller is not a scammer, and is an honest person with the intention of providing the title to the buyer, once the lien has been removed. 2) Thanks for the explanation as to why the Seller did not in fact have the legal right to sell the vehicle due to the encumbrance. In NY, does this mean the sale does not legally transpire until the date the title is signed over from the Seller to the Buyer, or does the Bill of Sale determine the date of sale? Thanks,
     
    Last edited: Sep 11, 2017
  11. te2243

    te2243 Law Topic Starter New Member

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    Yes, the most pertinent question is: "is the seller's insurance company liable for the cost of the vehicle?" Understandably, the insurance company will deny the claim, because, as you stated: the exchange of money, and possession, determines the insurable interest. However, the date of the transfer of title will be subsequent to the date of the loss, and the Seller apparently did not have the right to sell the vehicle. Are you abslutely certain that the insurance company has no legal liability to pay for the vehicle?
     
    Last edited: Sep 11, 2017
  12. army judge

    army judge Super Moderator

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    If someone sold you a vehicle with a title that had a lien, he is a scammer.

    Legally you can't sell what you don't own.

    The legalities have little to do with state lines.

    Are you willing to pay off the lien on a vehicle that's demolished so you can say you own it?

    What are you wishing to accomplish?

    You own nothing, unless the lien is cleared.

    To do that you she'll out more money to become the legal owner of scrap metal.

    Is that your goal?

    One would be forgetting this mess, and not being snookered in the future.

    Another would be trying to civilly sue the scammer.

    Which one seems more realistic to you?

    What did the scammer do with lienholder's money?

    Did the lender tell you the amount owed?

    Why didn't you send the money owed to the lender directly to the lender?

    Sumting Wong foo sho.
     
  13. adjusterjack

    adjusterjack Super Moderator

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    Yes, and I have 35 years experience in the insurance industry and a college degree in insurance to back that up.

    If that's not enough, there is this from the NY Court of Appeals:

    Google Scholar

    That decision has been cited 79 times in subsequent cases as recent as, at least, 2014.

    - Google Scholar

    Regardless of any title or loan issue, the seller got paid for the car and surrendered possession to the buyer. The seller no longer has an insurable interest. The buyer has had the insurable interest from the date of his purchase.

    In fact, it's entirely possible that the seller removed the car from his policy (or cancelled it if it was the only car on the policy) as soon as it was sold. Did he?

    Are you the buyer or the seller in this scenario?
     
  14. te2243

    te2243 Law Topic Starter New Member

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    thanks
     
  15. army judge

    army judge Super Moderator

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    If the thing "sold" to you has a lien against it, you don't own it.

    The "seller" may have taken your money, but it didn't legally become your thing.



    If you have a lien on your vehicle, you can still sell it, but the process will be more complicated.

    A lienholder is the financial institution or individual that holds the rights to the title of the vehicle.

    While you may or may not maintain possession of a title with a lien, the lienholder's signature will be required to transfer ownership once all debts have been paid.

    I suspect the "seller" retained ALL of the money he received.

    Therefore, the lien was never released.

    Therein lies part of the problem.

    Even if it had been insured, the lienholder would have to be made whole.

    A mess, a big smelly mess.
     
  16. te2243

    te2243 Law Topic Starter New Member

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    The Buyer did in fact establish insurance on the vehicle that was effective as of the date of purchase. The seller has maintained an insurance policy with the same insurer for approximately 10 years, with few claims of consequence (cracked windshield, etc) until mid-2017, when the insurer was compelled to make a payout for a totalled vehicle (avoiding a deer). The Seller is disinclined from submitting a second insurance claim, so soon after the insurance company made a payment large enough to wipe out ~75% of the previous decade's premiums.
     
  17. adjusterjack

    adjusterjack Super Moderator

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    There's nothing more annoying than people who post 9 yards of ______ without ever posting the important information until much valuable time has been wasted.

    Again, I am addressing strictly the insurance questions, without regard to title or loan issues.

    If he bought collision coverage, then what's the problem? What did his insurance company tell him when he made the claim? If he didn't buy collision coverage then he's SOL from the insurance standpoint.

    The seller has absolutely no obligation to submit a claim for the damaged vehicle and the buyer has no contractual relationship with the seller's insurance company.

    One more time:

    Are you the buyer or the seller in this scenario?
     
  18. Highwayman

    Highwayman Well-Known Member

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    That's meaningless. A "private road on private land" can still be considered a "public highway".
     
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  19. txls

    txls Well-Known Member

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    The buyer and/or his insurance is responsible. Doesn't matter if he has title in hand. The buyer sent the money to the lienholder to payoff the balance, so there is no scam on the part of the seller. It is not unusual for it to take several weeks to get a title from a bank once the loan is paid off. When the title is turned over, it will be completed with the date of sale that matches the bill of sale, which is prior to the accident.
     

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