I totalled my car and didnt have collision, what now...?

Question

I still owe 7, 000. What will happen if my Auto Finance Lender finds out? Is this allowed? If not, was my insurance company allowed to remove collision?

Answer 1

If you owe money on the car still that means you financed it, and if you financed it the lender usually requires that you obtain comprehensive AND collision coverage with a certain deductible. They also require that they be listed as loss payee on your auto insurance policy. Usually they require this before you can take the car off the lot. Once the lender receives proof that they are listed on your policy as loss payee and that the vehicle has comprehensive and collision coverage they should leave you alone. If you were to delete the collision the insurance company is required to let the lender know, same thing if you take the car off the policy. From there the lender calls you and tells you to put collision back on the car or they will take it. So did you have collision coverage when you drove it off the lot? Did you take it off later? If so, the lender should have known about it and contacted you. The only way this could have happened is if the lender was never listed on your policy, but they wouldn't let you start driving the car until they were listed...usually.

I am not sure what will happen if they find out. But its not going to be good, I can tell you that much.

Insurance companies can't make changes to your policy like delete collision coverage without your authorization. Did you ever sign something or call them and told them to take it off? If not then the insurance company shouldn't be allowed to take off the colision, unless the vehicle was a salvaged vehicle. Most insurance companies won't put collision coverage on a salvaged vehicle. But even if they take it off automatically for that reason, they are still required by law to notify you. Call them and ask them why it was taken off. Start there.

Answer 2

First, your lender should have requested to be listed on your insurance policy as a lienholder or loss payee. If they were, they would have gotten a copy of the policy & told you that you couldn't delete collision coverage. You deleted (or didn't purchase) the collision coverage. The insurance company is obligated to insure your vehicle as YOU request. If you didn't list your lender on your policy, the insurance company wouldn't know that you owe money on the car, so they wouldn't deny letting you delete (or not purchase) collision coverage. You will NOT get payment for your car on your insurance policy and you will still owe the bank what you owe on the loan. I can't imagine the bank not hounding you for a copy of your auto policy so maybe they forced placed insurance coverage on the vehicle (this would be comprehensive and collision coverage only). Call them up and ask if they purchased insurance on your vehicle. If they did, the coverage will pay off the loan (probably you will NOT receive any payment since the forced placed coverage probably only will pay for the loan payoff amount). If they didn't, keep making the payments to them (you may have to pay them in full since there is no longer any collateral for the loan) don't default or you will completely ruin your credit & you will have a tough time getting another car loan (or it will be a VERY high interest rate). Good luck.

Answer 3

As long as you continue to make the payments when due, the lender shouldn't care a bit. Read the papers you signed when you bought the car. There may be a requirement there to keep full coverage, including collision, on the vehicle until paid for. Your insurance company would not remove collision without notifying you in advance and getting your permission to do so.

Answer 4

If you did not pay for collision coverage, then you did not get collision coverage. No insurance company will remove a collision coverage if payment for such a coverage has been made.
Yes, you still have to pay the $7,000 you got to finance your car.

P.S. What looks strange in your case, is that the Auto Finance Lender, did not it seems, require of you to get a complete coverage on your car (collision included), lenders always ask for such a coverage before lending you any monies.

Answer 5

You should have checked your insurance better to make sure you had proper coverage. Nobody's fault but your own. You owe the money no matter what. If the collision was someone elses' fault maybe you can get their insurance to pay. If not you are out of luck and out of $7000.00. Your lender doesn't care ...they'll go after you for the money and trash your credit if you don't pay.

Lesson to be learned - always check your policy, always better to be over insured than under insured. Good time to remind you to carry uninsured/underinsured motorist coverage too. That will help you out if an uninsured motorist hits you and damages your car or injures you. Most of the time your insurance won't pay unless you carry the uninsured motorist coverage.

Answer 6

Your lender undoubtedly required a provision in your insurance to cover their asset (the vehicle). If not you still the loan amount. Since the vehicle lost some/ all of its value in the crash the lender may call your loan due in full soon. Best to talk to the lender now. You may have options. If you do nothing the worst will happen...meaning all parties will make decisions leaving you to pay up all at once.

The lender does not want your loan to go in default. If you call and honestly work with them they may have options and choices for you both to avoid this. Don't call, avoid their calls and it will get ugly.

Answer 7

You still owe the money, period. Your lender will find out, you also were required to carry insurance during the life of the loan, too bad you weren't responsible, you could be driving a car right now.

Answer 8

If you requested it they can. did you ever have collision. You still owe that money whether you have the car or not. Keep making the payments so you do not ruin your credit. My suggestion is call your lender and find out. Good luck.

Answer 9

why didnt you cover yourself fully? you will still owe the 7000 but if you had opted to take the collision, you would be in a better spot financially.

Answer 10

you owe the lender 7000...it's your fault not the insurance company's ...if it wasn't your fault the other guy's insurance would have paid...you are SOL