If you are paying a car loan, but the car is not being driven do you have to have insurance?
Liz asked:
I have a 2002 Altima, the motor is blown. I CANT drive it and I dont have the funds to get it repaired. Do you think the bank will let me drop the car insurance??
Create a video blog…instantly.
This is a good question for the bank! I don’t see why you couldn’t drop the insurance…
Hell no. If you have a loan you have to have full coverage. No lending company would be stupid enough to retract mandatory insurance b/c of a blown motor. What about your warranty, AUTO INSURANCE?? Do they cover any of your damages?
I know with our lender agreements, the customer must have insurance at all times when the vehicle is being financed. It’s protecting the bank’s asset considering they are the ones who hold the title.
Call your lien holder and find out before doing anything. A lot of times when you work with them directly, you can accomplish more than you’d expect and save yourself future hassles upfront.
Have you tried to make an insurance claim yet?
That’s a good question, just make sure that it’s registered as a non-op with DMV then ask the bank. Let us know what happens…….
Yes, you’ll have to keep the insurance on it. What if someone stole it while it is in the shop and had it crushed for the metal? Who would pay the bank? See if you can borrow the funds to get the car running again. If you can sell it for what you owe, then you could do that. what are you doing for transportation now? Are you getting by without a car?
Well, I hope it works out for you.
I’m pretty sure you still have to have insurance on it simply b/c you have the loan on it and do not own the title yet.
No, they won’t. You may be able to drop the liability coverage but you’ll still need to maintain collision and comprehensive coverage. If the vehicle is taken off the road the insurance company MIGHT let you drop the collision coverage but they’re not obligated to do so.
Certainly you can drop the insurance. Just pay off the loan, and then drop the insurance. If you can’t do that, you will have to continue to carry full coverage as required by the terms of the loan, which you agreed to and signed when you financed the vehicle. No where did it say “…unless of course you blow up the engine, and in that case you don’t need to fix it or pay insurance.” In fact if you read the contract you may find a clause that requires you to do the repairs to keep the vehicle running so it remains a valuable asset to the bank.
Most banks will allow for Storage coverage on the vehicle. (comprehensive) This is making sure that their investment in the vehicle is safe. If your insurance company won’t do that, then check with the bank and see how much this coverage would cost through them