Insurance on a car loan
Date: Sat, 08/22/2009 - 15:45
Submitted by DOLLARSandSINCE
on
Sat, 08/22/2009 - 15:45
Total Replies: 5
Well, the lien holder can ask you to have them listed in your po
Well, the lien holder can ask you to have them listed in your policy. I don't what happened earlier but it's not unusual for the banker to ask to be in the policy. This way they can secure that you wouldn't drop the necessary coverage in the future and if that happens they might then make the necessary adjustments to secure their interest.
I think I have figured out that they can ask to be placed on my
I think I have figured out that they can ask to be placed on my insurance but I do not think they can enforce it. It appears to me that the language in the loan does not specifically state to be listed. I argued with a few reps from the bank about it and the last one basically said that they would send me a letter when the insurance period ends to re-verify that my insurance is still in force. I will have to wait and see if they go against what they told me and actually purchase their own policy.
I have two problems with listing them on my insurance. The first problem is once they get on the policy it is difficult to get them back off even if you inform your company to remove them. The other problem I have is the insurance is their to protect my interest not theirs. If I have a catastrophic accident, then that insurance is their to cover me. I understand that it does not remove my obligation to fulfill the loan but I do not carry insurance to cover a loan. I carry it to cover my person. If they would have mandated it at the time of signing then I would have walked away.
I guess every loan contract is different, but I know my financin
I guess every loan contract is different, but I know my financing contract specifically requires the borrower(s): 1) to carry comprehensive and broad collision coverage on the vehicle at all times while it is being financed, and 2) to direct an endorsement and loss payable clause in favor of the lienholder (which basically means add us onto your policy).
You may have signed a separate insurance agreement. The fine print on our main contract lists insurance requirements; but just to get our point across, we make our customers sign a separate insurance agreement as well.
I believe even without it being explicitly mentioned in the loan contract, there are insurance provisions in the UCC that create an implied insurance requirement.
Quote:
The other problem I have is the insurance is their to protect my interest not theirs. If I have a catastrophic accident, then that insurance is their to cover me. I understand that it does not remove my obligation to fulfill the loan but I do not carry insurance to cover a loan. I carry it to cover my person. |
That is not true. They are securing your debt by taking an interest in the vehicle. If the vehicle gets wrecked, they have no more security. The liability/medical part of the insurance is to cover your person. But the comp/collision coverage is to protect their interest (and yours) in making sure the vehicle will be repaired/replaced/paid-off if wrecked.
Bottom line is that they do not want you driving around with no insurance on the car. Generally, in my experience, when people wreck their cars without insurance, they're not going to keep making the car payments after the car doesn't exist anymore. They want to be listed as a lienholder so that they can receive notice if your policy is going to be cancelled.
When I give out car loans, I make the customer show me proof of insurance at the time of closing; I'll also call the insurance company to verify coverage and add us as a lienholder right then-and-there while the customer is standing next to me. Then if I ever get a cancel notice, I send a certified letter out, which tells the customer they must provide proof of new or continued coverage before the cancel date or else we will be forced to protect our interest by either 1) adding our own insurance, which increases the monthly payments; or 2) repossessing the vehicle for failure to keep insurance.
I take insurance on my accounts very seriously and I will never let my customers drive uninsured. Right now I am actually in the middle of suing two different insurance companies for failing to send sufficient notice of cancellation.
[COLOR=black][FONT=Verdana][QUOTE=DebtCruncher;464056]I guess ev
[COLOR=black][FONT=Verdana][QUOTE=DebtCruncher;464056]I guess every loan contract is different, but I know my financing contract specifically requires the borrower(s): 1) to carry comprehensive and broad collision coverage on the vehicle at all times while it is being financed, and 2) to direct an endorsement and loss payable clause in favor of the lienholder (which basically means add us onto your policy).[/FONT][/COLOR]
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[COLOR=black]You may have signed a separate insurance agreement. The fine print on our main contract lists insurance requirements; but just to get our point across, we make our customers sign a separate insurance agreement as well.[/COLOR]
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[SIZE=3]If your financing contract says specifically what you have above and mine matched that wording then I would agree. The contract I signed makes no mention of a ???lien holder??? or a ???loss payee/loss payable clause???. I signed no other agreements. Maybe the bank messed up when the presented the documentation for signature. I think I am not obligated to add them based on what I signed. It is obviously in my best interest to not add them if possible. I don???t think I need to add them just because they really want me to or feel like it is in their best interest. [/SIZE]
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[COLOR=black]I believe even without it being explicitly mentioned in the loan contract, there are insurance provisions in the UCC that create an implied insurance requirement.[/COLOR]
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I am not sure what the UCC is or states but I do know that everyone is required to carry certain insurance to license a car which varies state to state. I suspect that is what the UCC would refer to but I do not know. Of course that minimum only covers the other party not both parties. Any auto loan I have signed required full coverage. I suspect all auto loans have language requiring full coverage. None of the auto loans I have had ever had a loss payee or lien holder clause including this latest loan. I even have another loan that I took out a couple years ago with a different bank and they never mentioned or required any additional language to be added to my insurance policy.
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[COLOR=black]That is not true. They are securing your debt by taking an interest in the vehicle. If the vehicle gets wrecked, they have no more security. The liability/medical part of the insurance is to cover your person. But the comp/collision coverage is to protect their interest (and yours) in making sure the vehicle will be repaired/replaced/paid-off if wrecked.[/COLOR]
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I think since you are in the loan industry you simply have a different perspective about what insurance is for and whose interest it should protect. Comp/collision coverage is to protect my interest which by default would include money owed against a vehicle. Of course it is in my best financial interest to have the proper insurance to cover any loan amount that would be due regardless of the condition of the vehicle since I would be liable for that amount. I do understand a bank looks at this differently which is why they put wording in the loan to force full coverage insurance. I personally carry full coverage on all my vehicles including those that I do not owe money on which is evidence that the insurance is there to protect my interest regardless of any monies owed against a vehicle. Really the only thing I am concerned about at this point is if they start trying to bill me for insurance even though I proved to them that the language in the loan does not call for the additional clause on my insurance.
wrecked my car have no ins. How can I find out if the bank has b
wrecked my car have no ins. How can I find out if the bank has been paid. I am sure they have to secure their interest. Now I am being sued. That would be double payment.
