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 their chatbots. Here's what we found:
Some of you may be wondering what “proper, full, and adequate” coverage means? Simply put, it means having the minimum liability limits required by your state and lender and comprehensive and collision coverage not exceeding a certain deductible. 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 accessible format, so that 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 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 if you have any questions!