Thursday, October 14th, 2004 — The infinite variety of auto-related claims keeps adjusters busy researching policy wording and case law. This month, we address two reader queries concerning motor vehicles.
We are handling a claim that involves an error made by a bank when it provided a car loan payoff. The bank gave the insured (an auto dealership) a car loan payoff amount that was much lower than the actual amount still owed by the owner. The dealer relied on this information and entered into an agreement with a customer to accept his car on trade and to apply the balance (based on the incorrect loan payoff amount) as a basis for a new car purchase.
After the deal was completed and a few weeks passed, the dealership called the bank to inquire why it had not yet sent the car title to the dealership. At that time, the bank informed the dealer that the wrong amount had been quoted and that the actual payoff amount was higher.