What is an insurance lien?

An insurance lien is an agreement between a borrower and a lender that allows the lender to have a legal claim on property if the borrower fails to repay the loan. In Washington, an insurance lien is a legal mechanism that allows your insurance company to have a legal right to possess or take ownership of your property if you fail to make payments on your insurance premiums or fail to fulfill the terms of your contract. An insurance lien can also be used when an insurance company needs to secure a debt for something you owe them. For example, if a person is responsible for a damaged property and cannot pay for the damages, the insurance company may put a lien on that person’s property to ensure they pay the debt. An insurance lien gives the insurance company legal access to the property and the ability to gather information they need to decide whether they will pursue the debt or not. In some cases, a lien may be held until the debt is paid and in other cases, the lien will stay in effect permanently.

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