check with the DmV they would better be able to help you.
I'm not sure what your question/situation is but... The Finance company can do what's called "forced insurance" meaning if you do not have insurance they will put insurance on the vehicle at a hefty cost to you. They can also repossess the vehicle even if you are up to date in payments but do not pay them their insurance rate.... and that money is still owed after the repo.
If you were forced into striking another vehicle by a vehicle which struck you first, the vehicle that struck you is (usually) responsible for the entire accident. However, if you are required to have insurance in your state, that will not get you out of any ticket becauise of your lack of insurance.
The Community answer is not entirely wrong. However, what is more likely to happen is that the finance company obtains "forced-placed" coverage on the car. This is physical damage coverage only and is designed to protect the lender's interest in the vehicle (because it is collateral for the loan). The premium for that insurance will be added to the loan balance. The premium for this kind of insurance is typically substantially higher than that for the collision coverage that you should have maintained.
Forced placed insurance coverage is insurance that is put on your property without your control because you either don't have the insurance you are required to carry or the mortgage company has not received a satisfactory copy of the insurance declaration page. You are responsible for paying for this coverage as they add it to you mortgage account balance. The forced placed coverage on covers the balance of the money owed on your mortgage and does not cover anything else like your contents are not covered, liability is not covered, etc. Only the banks interest is covered and the price is extremely high especially when you consider what they are actually covering.
Of course. The financing agreement that you signed requires you to have full coverage insurance and to make sure that they receive a copy of the insurance with their name listed as leinholder on the policy. This assures that they are paid if there is an accident and that they are notified in case of a cancellation of the insurance. There are laws protecting the leinholder in every state. If you break the contract with the leinholder they have the right to repossess the vehicle as well as the put what is called forced place insurance on the vehicle. This insurance protect the leinholder's interest only in case of an accident or damage to the vehicle. This coverage is physical damage coverage only and does not include liability or any other coverages and the premium is very high. The premium is charged to your loan account.
There are a variety of different scenarios that can occur if you are driving without insurance depending on whether you are caught by a police officer or if you cause an accident. If you are caught driving without insurance by law enforcement you will be issued a citation. The officer can legally impound your vehicle if they choose to do so. You will be responsible for showing up in court and pleading to your case. The judge can suspend your license, vehicle registration, issue fines, or sentence you to up to 6 months in jail. If you cause an accident and have no insurance, the party who suffers injuries and damage can take you to civil court for monetary compensation. The judge can grant wage garnishments and judgments against your assets. If your vehicle is financed, the lender will be notified you do not have insurance and will force place physical damage insurance to cover their financial interest in the vehicle. If you are forced placed insurance this will not offer you liability coverage, which is required by the state.
The unlicensed driver is responsible for all damages. If they are a minor the parents may be forced to take responsibility. Sadly, the owner of the vehicle MUST make any insurance claims they are eligible to make. The owner can ask the unlicensed driver to pay any excess on the insurance and even take them to court if they refuse to pay it. The driver of the vehicle is responsible to pay any amounts not covered by the vehicles owners insurance, including damages to the car. If the insurance premium goes up or you loose your no claim bonus then I'm sorry but the driver is not liable for that. If the unlicensed driver drove the vehicle without permission from the vehicle owner then the vehicle owner must report that the car was stolen at the time of the accident, then provide the insurance company with the police report number (you can tell the police you don't want to press charges). Under these circumstances even if the insurance company pays out damages for the vehicle they may chase the unlicensed driver to pay them back.
GAP insurance only covers the difference between what your car is worth and what you owe. So if your car is only worth $8,000 and the balance on the loan is $10,000, GAP insurance will only pay the $2,000 if your vehicle is determined to be a total loss by the insurance company. You still need to have physical damage coverage (Collision and Comprehensive) for the vehicle. If you don't, your finance company will get their own coverage. It's called forced placed insurance. Your finance company will charge you for it, you will not get any benefits from it, and it will cost you more money than if you insured it yourself. You should also find out how much your GAP insurance covers. Some cover up to 150 percent of the value of your car, some only cover 115. Using the same numbers; if your vehicle is only worth $8,000 and your policy only covers up to 115 percent of the value, GAP insurance would only pay $1,200 and you would have to pay the remaining $800.
The first thing that they will do is to put forced place coverage on the vehicle. This is a very expensive type of insurance that only protects the banks interest and only pays the bank. The premiums are added to your account and you are responsible for paying for the insurance. This insurance only provides physical damage coverage and will not pay for damage to your property or anyone Else's. It does not provide liability and does not meet the state requirement to allow it to be driven on the street. The second thing they will do is to repossess the vehicle because you have violated the contract that you signed with the lender to keep the required coverage on the vehicle. Oh yes, and the cost of impounding and storing the vehicle after it has been repossessed will also be charged to your account.
When you purchase a vehicle and fiancé it you sign a contract stating that you will carry certain insurance coverages and provide the finance company with the proper notification of such coverage. If you let your policy cancel you have violated the contract. If you do not list them as lienholder on your insurance policy you have also violated the contract. If you do not fix this situation when you finance company send you letters about this they have the right to repossess your vehicle and screw your credit up for life. You have obligations and the finance company has obligations under these contracts. If you have period of time when you cannot prove you have insurance then they will put forced place coverage on your vehicle to protect themselves and will charge the premiums to your account.
Forced Placed insurance is the coverage obtained by your Lienholder when you fail to comply with the insurance required by your agreed finance note. Forced Placed coverage will not provide you with liability insurance that meets your states Financial Responsibility requirements, it only insures the lienholders interest. The terms of your finance contract will describe the required coverage. Failure to comply with the terms of your finance contract results in the lienholder obtaining it to protect their interest in the financed property.
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