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Response to Indemnity Insurance?

from Lee (repossession@bigfoot.com)
Where customers do argue with lenders over indemnity insurance they usually use the threat of being prepared to go to court to argue it as a way of giving the lender an incentive to agree to a lower settlement.

This only works if the lender is not going to make much money out of (successfully) suing you anyway. The rest of the site goes into this - particularly the Do's and Don'ts section.

What it boils down to is this: Your lender is refusing to show you a relevant document. You could therefore say: "I'm happy to settle this but will need to see this document." The lender will not produce it. It will call your bluff and say: "We will sue and win." You then have to decide whether it is likely to carry out that threat and whether you think you will win if it does. In reality judges often think both parties are at fault but long before you get to that stage, ie before you get to court, your lender will try assess whether it is worth really suing you even if it is confident of winning. The Do's and Don'ts section sets out its thought process in some detail. Based on your assessment of whether you are worth suing, you have to decide whether you are prepared to call your lender's bluff. This is actually how most commercial legal cases are dealt with: economics is as important as moral victory for both sides.

Speaking personally, I would let them issue a writ (ie start the process of going to court) and use discovery to get that insurance document, whereupon I would show it to a competent lawyer (a rare beast) and decide whether to back down or continue on into court with a counterclaim.

My decision to do that would be based on how much I have to lose if I lose totally and how strong a counterclaim might be. But it should also depend on how mentally tough you are: going to court is a truly nerve-wracking experience. Which is why lenders find the threat of it so effective.

(posted 9108 days ago)

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