(a) In the event of a loss under the creditor-placed insurance policy, the insurer shall pay, at a minimum, the least of the following, the value of which shall be determined as of the date of loss:

Terms Used In Tennessee Code 56-49-110

  • Collateral: means personal property that is pledged as security for the satisfaction of a debt. See Tennessee Code 56-49-103
  • Creditor: means the lender of money or vendor or lessor of goods, services, property, rights or privileges for which payment is arranged through a credit transaction, or any successor to the right, title or interest of a lender, vendor or lessor. See Tennessee Code 56-49-103
  • Creditor-placed insurance: means insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss, expense or damage to collateralized personal property as a result of fire, theft, collision or other risks of loss that would either impair a creditor's interest or adversely affect the value of collateral covered by limited dual interest insurance. See Tennessee Code 56-49-103
  • Debtor: means the borrower of money or a purchaser or lessee of goods, services, property, rights or privileges, for which payment is arranged through a credit transaction. See Tennessee Code 56-49-103
  • Insurer: means an insurance company, association or exchange authorized to issue insurance policies in this state. See Tennessee Code 56-49-103
  • Net debt: means the amount necessary to liquidate the remaining debt in a single lump-sum payment, excluding all unearned interest and other unearned charges. See Tennessee Code 56-49-103
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Single interest insurance: means insurance purchased by the creditor to insure its interest in the collateral securing a debtor's credit transaction. See Tennessee Code 56-49-103
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) The cost to repair the collateral less any applicable deductible;
(2) The actual cash value of the collateral less any applicable deductible;
(3) The net debt, less any applicable deductible. The method of calculation of net debt payable pursuant to this subdivision (a)(3) shall be identical to the method of calculation of net debt for payment of premiums pursuant to § 56-49-105(a); or
(4) If single interest insurance is provided, the amount by which the creditor‘s interest is impaired.
(b) The net debt or actual cash value amounts in subsection (a) may be reduced by the value of salvage if the insurer does not take possession of the insured property.
(c) In the event of a loss, no subrogation shall run against the debtor from the insurer.
(d) Whenever a claim is made on a creditor-placed insurance policy, the insurer shall furnish to the claimant a written statement of the loss explaining the settlement amount and the method of settlement.
(e) A creditor or insurer may not abandon salvage to a towing or storage facility in lieu of payment of storage fees without the consent of the facility and the claimant. The insurer shall be responsible for the payment of towing and storage charges for a covered loss occurrence from the time the claim is reported to the insurer in accordance with the terms of the policy to the time the claim is paid. The insurer shall give written notice to the claimant when the claim is paid that the claimant may incur storage charges after the date the claim is paid.
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