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Why do I have to fill out a w9 form in order to receive an insurance claim?

Discussion in 'Automobile & Car Insurance' started by Galaxy, Jul 26, 2016.

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  1. Galaxy

    Galaxy Law Topic Starter Guest

    Jurisdiction:
    Michigan
    My wife was at work at a local community college. Our car which is insured was parked in the parking lot. A college maintenance employee backed a college maintenance vehicle into the back of our Subaru causing about $1900 in damage(lowest of two estimates). A police report was filed which stated the maintenance person was at fault. After filing the claim with the college their insurance carrier sent us a letter stating that they determined that our claim was valid and they would pay us but first we had to fill out this w9 form because of some new federal regulation or something. I don't think we should have to fill this form out in order to receive a property damage settlement that their client was at fault. Thank you for advice.
     
  2. army judge

    army judge Super Moderator

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    You're right.
    You aren't required to complete the form.
    If you don't, you won't be compensated.
    If you choose to go the "refusal route", you'll have to sue the college.
    As the college is a quasi-governmental entity, you'll then have to request the college's approval for you to sue them.
    That is right, sovereign immunity, and all that rot.

    That route will certainly delay your car repair.

    You could have your insurance company subrogate the matter, which is what I would have done originally.

    So, comply with the college's simple request to complete a W-9 form.
    The form is simply a way for the university to verify to whom the money is being paid.
    Nothing intrusive or sinister about the request.
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    https://www.irs.gov/pub/irs-pdf/fw9.pdf
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    Or, you could spend months, maybe years of your life chasing a lousy two grand in small claims court.
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    Then you could spend weeks trying to collect on the judgment.
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    Finally, subrogation might be another option.
    Anyway, good luck with whatever choice you make.
     
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  3. adjusterjack

    adjusterjack Super Moderator

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    The technical reason is that insurance companies report claims payments to the IRS as an expense and are required to keep records of people to whom they make payments. A W-9 is a convenient and consistent way for an insurance company (or any kind of business) to keep those records. The requirement for a W-9 is legal and enforceable under IRS rules.

    The non-technical reason is that the insurance company has no obligation to you and if you don't fill out the form you don't get the money.

    You don't pay tax on the money, so filling out the form shouldn't be such a big deal.
     
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  4. adjusterjack

    adjusterjack Super Moderator

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    The other driver's insurance company would pay the judgment and still want a W-9 before releasing the money.
    And the judge would say "Nothing wrong with that."

    And then Galaxy's own insurance company would want a W-9 to pay the OP after recovering the money from the other driver's insurance company.

    Sorry, Galaxy, you're not going to win this one.
     
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  5. army judge

    army judge Super Moderator

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    I'm not as thorough as you are, sir, when I'm not being paid or involved in a lawyer-client relationship..
    If I were being paid to advise a client, I'd be very thorough.

    In some cases, I might go a tad further.

    In most cases, the information I dispense is commiserate with the compensation I receive, NOTHING, NADA, ZILCH, ZERO.

    At my age, I have learned to hold my horses, restraining my impulse to "dew nuttin"; while achieving what I term: "state minimum".

    I have no quarrel with your thoughts, however.
     
  6. justblue

    justblue Well-Known Member

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    spammer reported
     

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