Title Loans

I believe you posted the same scenario in this thread: http://www.debtconsolidationcare.com/getting-loan/title.html

Below is a recap of my response on that thread:
=============================================
They want the insurance information because they want to put the insurance company on notice that they are a lienholder. Lienholders will get paid out of insurance proceeds before the named insured does. (Meaning the insurance company will cut a check to the title loan co to payoff the account, whatever's left they give to you).

The title loan co can't do much to you (other than file suit) if you don't provide the info. But there is a catch:

In a total loss, the insurance company will take your car and sell it to a salvage lot for scrap. THey need the title to do that. Therefore, the insurance company won't cut a check to you unless you can guarantee them the title. Since you don't have the title, you can't legally make that guarantee.

Conversely, if the insurance company trusts that you have the title, and they give you a blind check without title guarantee, they will be expecting you to mail them the title. When you don't, they will want their money back or they could sue you for it. Furthermore, if you had previously represented to the insurance company that you had a clear title in taking their check, it could be considered insurance fraud because you really don't have a clear title.

So you see the catch ... you do need the co-operation of the title loan place because they ultimately need to give up the title to the insurance company, or else the insurance company won't pay out the insurance claim.

As much as you hate the title loan, they are going to have to get paid before they release the title to the insurance company. You may as well give them the info because the sooner they get paid, the sooner they stop charging interest. The longer this drags on, the higher your balance will get, and the less you'll see out of the insurance check.