Question
Can force-placed auto insurance be removed or refunded?
I took out an auto loan and shared my auto insurance information with the loan company. But soon afterward I changed insurance providers and had the understanding that the new provider would update the loan company. I had issues logging on to the online loan account, and once I could finally log in after a few years, I saw a much higher amount come out of my bank account for the payment.
I checked the activity on my loan account and saw that the company had been adding their insurance (very expensive insurance!) every year since as far back as I can see. I never received any notification from them saying they would be adding it to my auto loan balance.
I have maintained sufficient insurance during the time the car has been in my possession. Can I get reimbursed for the extra money the loan company charged me for this extra insurance?
Answer
Kristine joined The Zebra in 2019 as an in-house content researcher and writer, with a property and casualty insurance license. Before joining The Ze…
Credentials
- Licensed Insurance Agent — Property and Casualty
- 6+ years of Experience in the Insurance Industry
I'm sorry you had to deal with that, but the good news is that you should be able to get reimbursed since you were actively insured during the time you had the loan. I would call the carrier you have/had and make sure the lien information is listed correctly, and then obtain all declarations and a letter of experience from the insurer. Take that to the loan/financing company and they should reimburse you for all the insurance charges. As long as you comply with the terms of your loan, they can not force-place insurance coverage.
This is also a great reminder that if you have a financed vehicle, it's important to update the lender if you have any big changes. If you can't log into an online account, it's best to reach out to the lender to get help so you don't miss an important announcement and can stay up-to-date. The insurance company will notify the lender if there are gaps in coverage or big changes that can affect their investment (the car). Remember, while the car has a loan, it's not entirely "yours" because the lender has a financial stake in the vehicle. That lender has the right to modify the loan agreement (or even repossess your vehicle) if you don't keep your end of the bargain (the loan agreement) when you get a car loan.
If you have any other questions, don't hesitate to ask.
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