Is it legal for a car insurance company to sell just liability coverage to a person with a lien on their car?

UPDATED: May 19, 2014

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UPDATED: May 19, 2014Fact Checked

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Is it legal for a car insurance company to sell just liability coverage to a person with a lien on their car?

My insurance company says its not illegal but the dealership where I got my car says it is illegal. When i bought the car insurance they told me that i would have full coverage but then when I had the accident they said I only had liability.

Asked on May 19, 2014 under Insurance Law, Kansas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

It is legal for the insurer to only sell liability insurance, even when there is a lien on a car. However, if you paid for or were told you were getting full coverage, you should have been provided it--failure to do so would be breach of contract and/or possibly fraud, so you might have recourse against the insurer. On the other hand, if what you bought was clearly liability-only coverage, then you would not have recourse--you received what you were paying for.

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