If I’m still paying off my car, do I have collision coverage?

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If I’m still paying off my car, do I have collision coverage?

Unbeknownst to me, I have been driving without collision coverage. So when I hit an interstate wall (no other vehicles were involved), my insurance company denied the claim. I’ve been told that, because my car is not paid off, the bank that is holding my title covers collision claims. Is this true?

Asked on June 18, 2012 under Accident Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

No, it is not true as a general matter: the bank that loaned you money or financed your car has a security interest in your car but is not your insurer. It is not obligated to provide collision coverage, and, furthermore, should not have been able to put such coverage on your car without your knowledge or consent. You can certainly inquire of the bank if they have any collision coverage (though if they do, it would likely  be for their benefit, not yours--e.g. to pay off the loan if the car is totalled), but there is no particular reason to believe they have provided this coverage for you.


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