I applied for a car loan with my bank, which required full coverage insurance. I was having problems with my ins. co. to switch the ins. coverage to my new vehicle and in the mean time my bank put ins. on my new vehicle without my knowledge. Two months later they are billing me $600 for the ins. I never knew I had. They did not even contact me indicating I had the coverage, nor did I receive ID cards or an outline of the coverage. Had I known they were having issues determining coverage on the vehicle with my current ins. co. I would have gotten involved to resolve the issue. 'Am I legally responsible to pay for this ins. my bank took out on the vehicle when I already had coverage? I've tried speaking to the bank and they indicate I have to pay it.
Read you paperwork on the loan over. Somewhere buried in the fine print it'll state that you must insure that vehicle and show proof. And if you don't the bank/lender will place "single interest" insurance on the vehicle. Not uncommon......shame on you for not following through on the insurance. You've learned a lesson and the bank charged you tuition.
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It's likely in the loan agreement. And they probably bought "single interest" insurance, meaning it only protects their collateral and does not cover you. Deal with this now, before you have a loss!
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Politely ask your bank to show you in the loan agreement the provision that allows them to purchase insurance for you. I imagine it is in there, the banks are pretty good about protecting their money and the collateral on the loans they make.
Assuming the loan agreement lets them do it, you're probably stuck paying for the insurance.
Disclaimer: answers posted by attorney Daragh Carter to questions posted on AVVO are NOT privileged or confidential and will not and should not be construed to create an attorney-client relationship between attorney Daragh Carter and you or anyone else.
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