OnlineAutoInsurance.com Discusses Coverage Requirements for Financed Vehicles
Rancho Cucamonga, CA, September 27, 2010 --(PR.com)-- In a recently released FAQ, the writers at OnlineAutoInsurance.com discuss whether a finance company can take an auto insurance policy out on a car purchased with a loan.
When a driver takes out a loan to purchase a car, the lender will likely ask for certain assurances. Among these is usually a requirement that the purchaser take out comprehensive and collision coverage for the financed automobile. But, if there is no policy in place, or if there is a lapse in coverage, a motorist’s financial institution can purchase auto insurance for the vehicle and the cost of the loan amount. Many sources advise against letting this happen, as this type of “forced insurance” often comes with higher premiums than could have been attained by the person who is buying the car. According to OnlineAutoInsurance.com, this is because lenders usually do not take the time to comparison shop in the way that an individual shopper might.
Financial institutions insist on a vehicle’s having comprehensive and collision coverage in order to protect the car and, in turn, themselves. “This is because they see your car as collateral for the loan,” writes the National Association of Insurance Commissioners, “and they want to make certain it is worth something if they need to repossess it.” This means that, as a result of these institutions’ motives, the policy purchased will likely include solely comprehensive and collision — not state-required bodily injury or property damage liability protections. After all, the point of forced coverage is to protect the lender, not the consumer.
Source: http://oci.wi.gov/faq/auto.htm#phydam
Many lenders check at multiple points to make sure that an automobile they have financed has protection. Financial institutions may, over the course of the loan’s repayment, randomly call the insurer in order to ensure that a policy has remained in place.
To access the full FAQ and learn more about protection for financed vehicles, readers can visit http://www.onlineautoinsurance.com/ where they will also be able to shop for comprehensive, collision and other types of policies with the free-to-use quote-comparison generator.
###
When a driver takes out a loan to purchase a car, the lender will likely ask for certain assurances. Among these is usually a requirement that the purchaser take out comprehensive and collision coverage for the financed automobile. But, if there is no policy in place, or if there is a lapse in coverage, a motorist’s financial institution can purchase auto insurance for the vehicle and the cost of the loan amount. Many sources advise against letting this happen, as this type of “forced insurance” often comes with higher premiums than could have been attained by the person who is buying the car. According to OnlineAutoInsurance.com, this is because lenders usually do not take the time to comparison shop in the way that an individual shopper might.
Financial institutions insist on a vehicle’s having comprehensive and collision coverage in order to protect the car and, in turn, themselves. “This is because they see your car as collateral for the loan,” writes the National Association of Insurance Commissioners, “and they want to make certain it is worth something if they need to repossess it.” This means that, as a result of these institutions’ motives, the policy purchased will likely include solely comprehensive and collision — not state-required bodily injury or property damage liability protections. After all, the point of forced coverage is to protect the lender, not the consumer.
Source: http://oci.wi.gov/faq/auto.htm#phydam
Many lenders check at multiple points to make sure that an automobile they have financed has protection. Financial institutions may, over the course of the loan’s repayment, randomly call the insurer in order to ensure that a policy has remained in place.
To access the full FAQ and learn more about protection for financed vehicles, readers can visit http://www.onlineautoinsurance.com/ where they will also be able to shop for comprehensive, collision and other types of policies with the free-to-use quote-comparison generator.
###
Contact
Online Auto Insurance
Benjamin Zitney
909-784-2471 x111
http://www.onlineautoinsurance.com/
Benjamin Zitney
909-784-2471 x111
http://www.onlineautoinsurance.com/
Contact
Categories