Local Rule 4070-1: Insurance

4070-1 Insurance

(a) Proof of Insurance. When the debtor retains a motor vehicle which is subject to the lien of a creditor holding a secured claim, proof of insurance against physical damage and loss must be furnished to the trustee and the creditor at or before the meeting of creditors. Failure to furnish proof of insurance shall be presumed to mean no insurance is in effect. The proof of insurance must state that coverage will continue for at least 60 days from the date of the meeting of creditors. On or before the date the insurance coverage lapses, proof of renewal or new insurance coverage must be provided to the trustee and the creditor.

(b) Definitions.

(1) "Motor Vehicle" shall include every item of transportation which is subject to registration pursuant to TENN. CODE ANN. § 55-3-101; provided, however, that the items of transportation excluded from the registration requirements in TENN. CODE ANN. § 55-3-101(a)(1) through (8) are not excluded for purposes of this rule.

(2) "Proof of Insurance" shall mean a certificate of insurance or such other written evidence of sufficient reliability from the insurance carrier stating the amounts and types of coverage, a notation of the secured party as loss payee, and the time period for which coverage exists.

(c) Lapse of Insurance. If, during the pendency of a case, insurance lapses on any motor vehicle subject to the provisions of this rule:

(1) A creditor with an allowed claim secured by the motor vehicle shall notify, in writing, the debtor and the debtor's attorney of the lapse of insurance. Service of the notice shall be in the manner specified in FED. R. BANKR. P. 9014.

(2) The debtor shall be enjoined from using the motor vehicle as long as the motor vehicle remains uninsured.

(3) If the debtor fails to provide proof of re-insurance to the creditor within three business days following delivery of the notice of lapse, the debtor shall surrender the motor vehicle to the creditor, or the creditor may take possession of the motor vehicle securing its claim and hold the same pending proof of insurance by the debtor. For purposes of this rule, delivery of notice is deemed complete three days after mailing.

(4) Within 7 days after taking possession of a motor vehicle based on lapse of insurance, the creditor shall file a motion for relief from the 11 U.S.C. § 362 stay.

(d) Second Lapse of Insurance. In the event insurance on a motor vehicle subject to this rule lapses twice during the pendency of a case, the court may, upon the filing of a motion accompanied by an affidavit evidencing compliance by the creditor with this rule and evidencing the previous lapse of insurance, grant the creditor relief, including relief from the stay of 11 U.S.C. § 362, without further hearing. The creditor shall include a proposed order granting the requested relief.