Question
Can a lender dictate what my deductible is?
The company financing my car advised me that I must have a $500 deductible for both comprehensive and collision coverage and that I must maintain this coverage through the life of my loan. It is entirely too expensive with some of the things on my driving record. I’m wondering if a lender is allowed to have a deductible requirement? If I am to make changes to the deductible amount, while still maintaining my comp and collision, is my insurance company required to notify them? Say, I change my deductibles to $2000 when it’s time to renew — will they send my lender a notice that I’ve made this change?
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
Unfortunately, the terms of your loan can dictate what your coverage deductibles must be. Your lienholder may not necessarily notice right away if you change your deductible, but if they catch on they will add force-placed insurance, also known as collateral protection insurance, as a part of your monthly payments. You would potentially lose more money if you don't maintain the insurance requirements of your lender by paying for additional coverage you don't need.
If you have any questions, feel free to ask.
Insurance is complicated, but it doesn't have to be.
The Zebra searches all of the top insurance companies, in one place, so you can compare the cost and coverage you need to protect your car, home and other property.
Step 1: Tell us a little about yourself
Choose an insurance product and enter your zip code to get started.
Step 2: Sip your coffee while we find the best quotes
Enter the necessary information and then sit back while we find quotes from 100 top insurance carriers.
Step 3: Compare your quotes
Compare quotes side-by-side to find the right match for you, whether it's home, auto, or more.
Step 4: Let our agents do the hard work for you
Once you pick your policy, our agents are here to get you over the finish line. Then just relax and enjoy your savings.
