Can a bank that provided car loan take out insurance coverage and bill me for the costs

Generally the answer is yes. The financing agreement normally gives the bank the right to obtain insurance if yours lapses or is in any way insufficient. They do this for their protection, not yours. However, if you did have coverage and can prove it, they will often retroactively cancel what they purchased.

I would suggest that you obtain proof from your own company of your coverage, and of the effective date. If it shows that you had your insurance in force when you were required to, send them a copy and demand that they remove the charge for the "force-placed" insurance. If they fail or refuse, see an attorney.

The National Association of Consumer Advocates maintains a geographical directory of consumer attorney members in all states. It can be found at www.naca.net

This type of arrangement with regard to the bank purchasing an insurance policy and billing you in the event that you do not maintain insurance is typically speeled out in the vehcle loan contract, and it typically provides that you authorize the lender to proceed with procuring insurance on the vehilce in the event that you fail to provide such coverage or thte coverage that you have provide lapses.

Nonetheless, I would recomend reviewing all of the details of your circumstances with an attorney in your area experienced in consumer rights and consumer protection law to ensure that the bank acted appropriately and within the confines of the contract and the law in imposing this insurance on you without your prior knowledge or consent.

NOTE: This answer is intended to provide general information only with regard to a limited and incomplete set of facts. This answer does not constitute legal advice, and no attorney client relationship is established by the provision of this information.

Read the loan documents carefully. They will spell out the rights of the lender. It is not uncommon for a bank to have a provision in the loan contract which permits them to purchase insurance and charge you for it. Check to see if the loan contract contains an arbitration clause. If it does, you may have to take the bank to arbitration, but if the bank has acted strictly within the provisions of the loan contract, you may be out of luck.