In financing a new auto, how does the bank find out

[Don B]

if you quit buying insurance? Do they leave it up to you? to be honest, or do they buy it for you, or does the insurance company report the cancellation, or what. Someone in the insurance and registration section says they wrecked a financed car and are wondering if the bank will find out that the car didn't have the required insurance that the bank required.? I find it hard to believe the bank doesn't check to make sure the insurance provisions are met.

[Joe P.]

The banks DO periodically check, if you fail to carry suitable coverage they will insure (usually) the vehicle at a very inflated rate.

[mszt_x0]

When a car is being financed the car is to have full coverage insurance during the peroid of the loan. The banks do check with the insurance companies from time to time to make sure that the proper insurance is placed on the financed vehicle. If coverage is lost or dropped and a wreck does happen, the bank would usually require the insurance information to try to get the loan paid for if the car is toatled. The best thing to do would be to get a quote for full coverage insurance on the car and include the insurance preimum in the loan so that way you know insurance will be taken care of for the duration of the loan.

[Kasey C]

Bank gets notified. Besides, they'll sue your pants off if you drive it without insurance and got into a wreck. You bought the car, you're supposed to keep it covered. Nowadays with automatic withdrawls it's not that hard.

[nina3vedi]

As the loss payee, the bank is notified as soon as your insurance coverage is subject to cancellation. You are required to have full coverage any time a vehicle is financed.

[PatriotRider]

See, the thing you have to understand is that it's NOT YOUR CAR...it's the bank's car...until you make the last payment and the loan is totally satisfied. If you default, they can come get it whenever they're ready. Likewise, if you drop the insurance, in most states the insurance company is obligated to notifiy the lienholder that their property is no longer covered. It's nice of them to let you drive it, though, while you're wearing it out and paying for it. K ;o)

[Michael J]

yes,the banks are notified by the insurance co,and if you cant prove you have currant coverage,the bank will get its own insurance to only cover their interest at your cost by tacking it on to your monthly car payment usually an additional $300.00 a MONTH.it almost happened to me because the freakin bank couldn't find their freakin faxes!!