My bank added forced insurance that is too expensive
My bank has added forced insurance to my auto loan and in the contract it says it can do so but doesn’t state they source it or or how much. Along with those two, they source it out to one company who also sources it out to another company. With this forces insurance they didn’t give me an option to set me deductible although the contract only stipulates that “insurance deductible needs to be below $500”. My rate is also extremely high. Lastly they didn’t increase my payments to cover the insurance but instead added it to the loan amount therefore tacking on interest to the insurance. I don’t believe this legal much less moral. Any information you can provide me would be great. Laws on this subject, advice etc etc
May 5, 2018Charlotte, NC
May 5, 2018
Because your bank has an invested interest in the vehicle, they have a right to add insurance to it if you fail to do so. The easiest way to avoid situations like this is to always keep your insurance up-to-date and paid for. A bank cannot force coverage that you don't want unless you fail to do so yourself. I would see if showing proof of insurance elsewhere will allow you to remove this forced coverage, it's a possibility.
In terms of the bank mandating the deductibles, they do this because they believe having high deductibles can disincentives you to file a claim and thus protect their investment.