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Pops was handling the insurance on my car, now he isnt. So atm I am insurance free on my car. My car loan people sent me a letter in the mail stating I need to show them proof of insurance that is current. I have a company searching for the best rates right now, but the main question is, what can the car loan people do if I dont provide it for say 1-2 weeks?
 

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[quote author=ITHURTZ link=topic=172231.msg3648917#msg3648917 date=1273183950]
Pops was handling the insurance on my car, now he isnt. So atm I am insurance free on my car. My car loan people sent me a letter in the mail stating I need to show them proof of insurance that is current. I have a company searching for the best rates right now, but the main question is, what can the car loan people do if I dont provide it for say 1-2 weeks?
[/quote]

Yeah, no reason to not have insurance within 24 hours.

What can they do? Take back the car.
 

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I believe you also need full coverage while the loan is outstanding. So, I don't believe you will get away with just liability.
 

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[quote author=NefCanuck link=topic=172231.msg3649148#msg3649148 date=1273192470]
Or call in the loan immediately because of the "risk" to their loaned money, esp. if you're still driving thee thing around.

NefCanuck
[/quote]

if he's driving around without insurance KNOWINGLY.... then, ya....
 

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In all actuality, they will just put an insurance policy on the car, usually at an extremely high rate, and adjust your loan payment accordingly. Wells Fargo did this when I changed insurance companies.
 

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Why would you need to insure the car just because there is a loan on it?

You can have a car loan without insurance on the car itself if you wanted, it just means you cant drive it. You can always drive the car without insurance but that is not a very smart move at all.

Most loans have a "loan insurance" or "life insurance" policy factored into them when you finance the car in the first place. This basically covers the cost of the loan should something happen to you. The bank will not go after your family for the money. Or if you should lose your job they will cover the car payments up to a specified amount. At any rate, if you are insurance free i would not be driving the car just for your own sake and finding an insurance quote should take no more than a day at most, especially if you're having a broker do it.
 

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Most car loans that I am aware of require you to carry full coverage for the life of the loan. Maybe it's different in Canada.

What I'm also wondering is how the car managed to stay tagged without insurance. The DMV would have a field day with that one. Hopefully he doesn't get pulled over any time soon - or worse, he hits someone.
 

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[quote author=Canadian_LX link=topic=172231.msg3649332#msg3649332 date=1273201213]
Why would you need to insure the car just because there is a loan on it?

You can have a car loan without insurance on the car itself if you wanted, it just means you cant drive it. You can always drive the car without insurance but that is not a very smart move at all.

Most loans have a "loan insurance" or "life insurance" policy factored into them when you finance the car in the first place. This basically covers the cost of the loan should something happen to you. The bank will not go after your family for the money. Or if you should lose your job they will cover the car payments up to a specified amount. At any rate, if you are insurance free i would not be driving the car just for your own sake and finding an insurance quote should take no more than a day at most, especially if you're having a broker do it.
[/quote]


agreed. If you don't have insurance on your car, get it off the street. get it off the road and into the driveway.

Plus, why would a loan need to see proof of insurance? As long as you're paying your loan off every month why would they care?
 

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[quote author=casey.weber link=topic=172231.msg3649339#msg3649339 date=1273201573]
Plus, why would a loan need to see proof of insurance? As long as you're paying your loan off every month why would they care?
[/quote]

When I bought my car, I had to submit proof of full coverage from my insurance company. I didn't even drive the car away without insuring it fully. Every time I renewed my policy, they would submit proof to the lien holder (i.e. the lender) to show proof of insurance. I was never hassled because of that.
 

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So you'd pay cash to avoid showing proof of insurance? Heh.

Are you not required to carry insurance while driving the car? What if you hit someone and you have no insurance?
 

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No, I pay cash because its better than financing through a dealer and can have it paid off in 4 months like I did with my 3.

I just don't like the idea of what the OP has with his bank and possibility of losing his car because it's not insured. (Unless I'm completely out to lunch on this one.)

Of course you're required to be have PLPD insurance for your vehicle. Not discrediting this at all.
 

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[quote author=Canadian_LX link=topic=172231.msg3649332#msg3649332 date=1273201213]
Why would you need to insure the car just because there is a loan on it?

You can have a car loan without insurance on the car itself if you wanted, it just means you cant drive it. You can always drive the car without insurance but that is not a very smart move at all.

Most loans have a "loan insurance" or "life insurance" policy factored into them when you finance the car in the first place. This basically covers the cost of the loan should something happen to you. The bank will not go after your family for the money. Or if you should lose your job they will cover the car payments up to a specified amount. At any rate, if you are insurance free i would not be driving the car just for your own sake and finding an insurance quote should take no more than a day at most, especially if you're having a broker do it.
[/quote]

This may be true in Canada, not entirely true for the U.S.

First, on any financed vehicle, you must carry full coverage to secure the collateral for the loan. If you don't, you're basically defaulting on the loan contract. Most likely, they will just insure the vehicle themselves as mentioned, but they still have the option to call the loan.

As far as not coming after your family for the money, again that's not how it works in the U.S. Lenders routinely pursue losses against estates and against those who default owing more than the car's worth.

I've never seen a car loan contract in the U.S. that didn't have an insurance clause stating that you would maintain full coverage on the vehicle being financed.
 

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What I dont get is why the loan company cares whether or not you have insurance? Its not like they arent still entitled to their money if something goes wrong with the car? I can understand if you are LEASING a vehicle because you dont actually own the car, but a car is simply just a loan. I mean, you could take out a personal line of credit in the amount of 10,000$ at probably the same interest rating, pay off the "car loan" and then take insurance off the car if you wanted? It makes no sense to me.
 

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[quote author=Canadian_LX link=topic=172231.msg3649376#msg3649376 date=1273203297]
What I dont get is why the loan company cares whether or not you have insurance? Its not like they arent still entitled to their money if something goes wrong with the car? I can understand if you are LEASING a vehicle because you dont actually own the car, but a car is simply just a loan. I mean, you could take out a personal line of credit in the amount of 10,000$ at probably the same interest rating, pay off the "car loan" and then take insurance off the car if you wanted? It makes no sense to me.
[/quote]


exactly what I did with my car. LOC. but, insurance 24/7.
 

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[quote author=Canadian_LX link=topic=172231.msg3649376#msg3649376 date=1273203297]
I mean, you could take out a personal line of credit in the amount of 10,000$ at probably the same interest rating, pay off the "car loan" and then take insurance off the car if you wanted? It makes no sense to me.
[/quote]

You could, sure. Then you'd pay a higher interest rate because the loan is not secured with collateral. If you sign a contract at favorable terms because you're putting up collateral, it's not out of line for the lender to request their interests to be insured.

Do you think it's ok to not have homeowner's insurance when you have a mortgage?

If you were loaning your money to a friend to buy a car and held the first lien on it, would you not want that friend to insure it against loss?
 

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[quote author=fatabbot link=topic=172231.msg3649385#msg3649385 date=1273203688]
[quote author=Canadian_LX link=topic=172231.msg3649376#msg3649376 date=1273203297]
I mean, you could take out a personal line of credit in the amount of 10,000$ at probably the same interest rating, pay off the "car loan" and then take insurance off the car if you wanted? It makes no sense to me.
[/quote]

You could, sure. Then you'd pay a higher interest rate because the loan is not secured with collateral. If you sign a contract at favorable terms because you're putting up collateral, it's not out of line for the lender to request their interests to be insured.

Do you think it's ok to not have homeowner's insurance when you have a mortgage?

If you were loaning your money to a friend to buy a car and held the first lien on it, would you not want that friend to insure it against loss?
[/quote]


Speaking of which, you HAVE to have insurance on your home now in order for the mortgage to continue to exist. As well as mortgage insurance on all house purchases with less than 20% down payment.
 
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