Logbook loan against car which is now a write off

[Dm84]

Sorry to bother you all. Just a quick question really. I owned a 2015 car outright. Stupidly, I took a £3000 logbook loan out against it. I've been paying monthly etc but just last week, was involved in a non fault accident. The insurance offer came back today and it just about covers the logbook loan. My question is this.. will my insurance company pay me directly? Or will they pay the logbook loan company first then give me whatever (if anything) is left? I'm in no way trying to get out of paying the loan back..I owe it and will pay it but I would have preferred to continue monthly payments as normal so then I have money to buy another car. I read somewhere that if the loan is a "fixed sum loan agreement" the insurance company will pay me directly. They will only pay the loan company if it's on hire purchase. How true is this? I've looked at the logbook loan agreement from Varooma and it does say it's a fixed sum loan agreement. However, there is also a bill of sale.. all in all, will I get the insurance money it will Varooma get it?
Thanks in advance

[R0b]

Re: Logbook loan against car which is now a write off

Hello,

I would say that generally speaking, the insurance pay will go directly to you. However, you may wish to check the terms of the loan because it may stipulate for example, that if the car is deemed a write off then the loan becomes immediately repayable. If the company then finds out it may initiate proceedings to recover the money and if you have spent it, may cause you some trouble.

Check the terms of the agreement first before spending it.

[Dm84]

Re: Logbook loan against car which is now a write off

Thank you for that. I did ask Varooma what the terms and conditions were in the case of a vehicle deemed a write off and they said nothing specifically is in the terms and conditions..however, they said because of the bill of sale, they are technically the legal owners of the car and therefore any insurance payout will go to them directly. Can they do this?
Sorry!!

[des8]

Re: Logbook loan against car which is now a write off

You will most probably find in your policy wording a clause reading like this:
If your car is currently on a hire purchase or financing agreement we will settle the claim by paying the legal owner.We will only pay you any remaining balance if ownership of the caris transferred to you

I would understand this to include log book loans where the vehicle has been sold as evidenced by the bill of sale.