When consumers in the San Jacinto area need car insurance on a vehicle that is being financed, there are additional things that the consumer needs to do when purchasing auto insurance. When the auto loan contract was originally signed, one of the terms was for the borrower to carry sufficient insurance. In most instances, this means having full coverage including collision and comprehensive coverage. A maximum deductible may have been mentioned as part of the loan contract as well. The lender needs to be informed that the insurance has been bought. That is the extra step that consumers need to perform to have insurance on their financed vehicles.
First of all, it is very helpful to get the lender’s name, address, phone number, and account number prior to purchasing auto insurance in San Jacinto, CA. That information will be needed when auto insurance in San Jacinto, CA is purchased. At the time the insurance is purchased, the insurer will need information about the auto loan and the financial institution that is holding the lien on the car. The insurer will need to send a copy of the policy details to the lender. This information is also used to pay the lender if there is a claim that results in the vehicle being totalled. When the vehicle is totalled, the lender will be repaid. Any remaining amount after paying the lender for the totalled vehicle goes to the motorist.
If the lender is changed due to refinancing the auto loan, the consumer will need to let the insurance company know who is the new lienholder on the vehicle. The new lender will get information about the auto policy.
Consumers should not think about driving without coverage while there is an outstanding balance on the auto loan. The insurer will notify the lender when a policy has been cancelled. The borrower may be in violation of the original loan contract if a replacement policy has not been purchased. If no proof of insurance is submitted, the lender will buy a more expensive policy that is designed to protect the lender rather than the borrower. The borrower will have to pay for the policy. That is why it is important to maintain auto insurance while there is an auto loan.
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