Can force-placed car insurance be removed on a car that does not work?
Our car's engine blew last September. We have canceled the insurance since the car does not work and it's an 8k repair on a car valued at around 2k. We have already purchased a new car and wanted to just pay off the loan associated with the dead vehicle. The lender put force-placed insurance on the car and will not remove it. We have asked what proof do they need to get it removed but they will not budge. Do we have any options other than taking out a personal loan to pay off the car?
Most loan terms require that the financed vehicle must carry the comp and collision coverage. Even if the vehicle is broken-down and non-functioning, you still have to follow the stipulations set by your lienholder. Usually, to get rid of force-placed collateral protection insurance, you'd need to provide evidence that you carry a sufficient amount of insurance (full coverage) to your lender.
If it's possible, I would try to salvage the old car or sell it for parts to help recoup costs and pay off the loan.
If you have any questions, feel free to ask.