I am buying a newer used car and I was wondering how the bank that I’m getting a loan from finds out what insurance I have?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2010

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Insurance Question from Frankfort, MI

Asked on 07/15/2010

I am buying a newer used car and I was wondering how the bank that I’m getting a loan from finds out what insurance I have? Do they contact the insurance company directly or does the insurance company get them the information? Thank you kindly! Bridget

Answer given on July 16, 2010

When you buy a car you are expected to call your insurance agent and tell them about the car. Your insurance agent will need the details-year, make, model, odometer and VIN (vehicle ID number) to get the insurance started.  They also need the bank information so they can send them evidence of insurance.  The paperwork you sign when you get the loan also gives the bank your insurance agent and/or company information.  If the bank does not receive any paperwork from the insurance company within 10-14 days they will contact your insurance agent.  If your agent did not have the information, or had incorrect information, they will then update your insurance policy and send proof to the bank.  However, it is easier and quicker to just let your insurance agent know about the loan when you call for the insurance.  Also, as you probably know, you will need to buy insurance on the car, not just liability insurance, if you have a loan.

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