Loan Requirements

Written By
Connor Thomson
Posted
August 31, 2022

Whether you buy, finance, or lease a vehicle, you must carry auto insurance. How much?  Well, that depends on a few things: (1) what state you live in (for registration purposes), and (2) your lender.  Different states have different minimum liability limits, and different lenders have different insurance requirements.  This blog focuses specifically on what each individual lender requires, so that you can reference yours.  To make your life easier, we compiled information from lenders’ websites, called their customer service representatives, and engaged with chatbots. Here's what we found:

Lender

Insurance Requirements

PenFed Credit Union

  • No minimum

*You must show proof of comprehensive and collision coverage

Ally Financial

  • Bodily Injury: $100,000/$300,000
  • Property Damage: $50,000/$500,000
  • Comprehensive and Collision: full
    • $1,000 maximum deductible

PNC Bank

  • At least the amount of the loan secured by the vehicle

Chase Bank

  • Proper coverage

*See your contract for more information 

Wells Fargo

  • Whatever is stated in your loan contract

Bank of America

  • “Full” coverage

Capital One

  • “Full” coverage

Mountain America Credit Union

  • Comprehensive and Collision: full
    • $2,500 maximum deductible 

American Heritage Federal Credit Union

  • Comprehensive and Collision: full (and “adequate”)
    • $1,000 maximum deductible

Some of you may be wondering what does “proper, full, and adequate” coverage mean?  Simply put, it means having the minimum liability limits required by your state or lender, and comprehensive and collision coverage not exceeding a certain deductible. Leasing companies and lenders make this part of the car-buying process more complicated than it has to be with their vague words and lack of transparency.  We are doing our best to arm you with information in an easy-to-read format, so you know how much auto insurance you're required to purchase before you call your agent (hopefully us! 😊) and update your policy.

One last thing to keep in mind before you scroll through the links and images below is that your lender must be listed on your auto insurance policy as an “Additional Insured” and “Loss Payee”, since they have a financial interest in your vehicle. An “Additional Insured” is extended liability coverage.  A “Loss Payee” is extended property damage coverage and a share of the payment in case you get into an accident.  Hit us up directly with questions!

List of Lenders:

PenFed Credit Union

Ally Financial

PNC Bank

Chase Bank

Wells Fargo

Bank of America

Capital One

Mountain America Credit Union

American Heritage Federal Credit Union

About the Author
Connor Thomson
Freelance Writer
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