by melakwa » Thu Jan 27, 2011 05:06 pm
Hi, I need some advice. I financed a used car for my daughter to drive. The deal was she'd pay for the insurance. She did get a policy w/ liability and uninsured motorist, but unfortunately she did not include collision/comprehensive in the policy, and I failed to check and make sure she was covered. Last week she was at fault in a wreck and the front end damage to the car is extensive - it will cost far more than the value of the loan ($5k) to fix it. The bank that financed the deal took a copy of my existing insurance card, but my daughter insured it with a different carrier. I know I'm on the hook for the loan. My question would be if the insurance company my daughter used would normally send a copy of the policy to the bank, since they're listed as the lien-holder.
Posted: Wed Oct 15, 2014 03:33 pm Post Subject:
Hi there,
Here is my dilemma. I purchased a car in May 2014, I updated my car insurance. Several weeks later I received a letter from my lienholder requesting proof of car insurance. For no particular reason, other than I simply forgot to mail my proof of insurance to the lienholder, I received another letter requesting my insurance details, which I then mailed and left a message on their voice mail.
A week or so later, I then received an email from my car insurance stating that it was a requirement from my lienholder that I had to have collision insurance. I thought that I had chosen collision when I added the car to my insurance. I immediately added the collision to my policy.
I then received a letter from my lienholder stating that because I had not provided proof of insurance they were going to add their own collision insurance to my loan with an increase to my monthly payments, the monthly payment being doubled to over $400.00. I called the lienholder stating that I had provided my details, via the postal service and I had also left a message on their voice mail. I was told to disregard the letter and that a refund would be actioned and that the matter had been resolved.
Yesterday, I received another letter from my lienholder stating that a partial refund had been credited to my account, and that my payments were now going to be $400 per month. I cannot afford this amount! The lienholder contact wasn’t too clear on her explanation as to why there was only a partial refund, but my assumption is that my lienholder is going to backdate their insurance from May-Sept 2014 and add that to my loan.
Is this a usual practice? Please advise.
Thank you.
Debra
Posted: Thu Oct 16, 2014 12:28 am Post Subject:
Is what usual practice? That a lien holder adds 1st party coverage when the person does not add it, that they don't confirm that they ever received notification of collision coverage or that its backdated? You don't really provide any info on what took place with the coverage. I'm not sure you understand yourself. I'd simply call the lien holder and find out the details.
Posted: Tue Oct 28, 2014 01:28 am Post Subject:
For no particular reason, other than I simply forgot to mail my proof of insurance to the lienholder, I received another letter requesting my insurance details
"For no particular reason"? LMAO! You breached your contract, that was the reason. Like too many people in America these days, you believe that "It's not my fault!" Accept responsibility and the consequences.Is this a usual practice? Please advise.
Your question is not about insurance, it is about the enforcement of a loan contract.As a condition of borrowing the money you needed to purchase a vehicle, the lender wanted a security over and above the value of the vehicle in the form of collision insurance, and you agreed to provide proof of collision coverage. You failed to do that in a timely manner, and this resulted in the lienholder enforcing its contract by obtaining "forced placed" collision coverage on the vehicle at your expense.
Once you provide proof of collision coverage, the forced placed coverage will be rescinded to the date the proof of collision coverage began. Any amount paid after that date for the forced placed coverage should be refunded, but there may be a provision in your loan contract that permits liquidated damages to the lienholder, entitling it to retain a portion of the premium.
I would recommend that you read your loan contract and see what it says about this. Then talk to a live person at the lender to see what else needs to be done. If you don't understand the loan contract, then get some advice from an attorney.
And remember this little fact: No one forced you to sign the auto purchase contract. You were given an opportunity to read it before you signed it. You also signed a loan contract, and the same thing applies. You were not forced to sign it, and you had an opportunity to read it before you signed it.
You alone are responsible for what you did or did not read, unless you cannot read and everyone involved knew you could not read.
Add your comment