Is it illegal to carry liability insurance rather than full coverage on a financed vehicle?

I'm still making payments on my car but considering dropping full coverage to save some money. I know lenders require full coverage but is doing this illegal?

Jan 26, 2020 San Antonio, TX

Kristine Lee

Jan 26, 2020

Though it's not illegal, you will be violating the terms of your loan if you change the breadth of your coverage in favor of liability-only. Your lienholder will then force-place collateral protection insurance to your monthly payments. This could result in you being forced to pay for insurance you don't need until you can prove to the lienholder that you have sufficient insurance.

If you have any questions, don't hesitate to ask.

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