What is an insurance lien?

An insurance lien is a legal document that gives an insurance company a right to claim the proceeds from a claim settlement. This applies only when the insured, or the person making the insurance claim, has not paid their policy premiums in full. The insurance company then has the right to take a portion of the proceeds from the settlement to cover the unpaid premiums. In North Carolina, insurance lien claims are regulated by state laws. Before issuing a lien, the insurance company must provide written notice to the policy holder that states the amount owed on the unpaid premiums. In addition, the insurance company must also provide a lien release as soon as it has been paid in full. Insurance liens are usually enforced when the claim is being settled in court. The insurance company can sue the claimant for the payment of the unpaid premiums. The court may then order the claimant to pay the insurance company’s lien before the claimant can receive the settlement. It is important to keep up with policy payments to avoid an insurance lien. Negotiations can be made with the insurance company, however, if the policy holder is unable to pay. In any case, it is important to understand the state laws governing insurance lien claims in North Carolina.

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