QUESTION
Does may lien holder have to notify me when car insurance drops collision coverage?
Asked on Aug 25th, 2022 on Insurance - North Carolina
More details to this question:
My car was insured by NC farm bureau written for my son who is part owner. My contract with wells fargo states that the car shall have coverage with NC Farm Bureau. My son did not pay the $25 annual dues so they altered the policy to delete the collision and comprehension coverage. My son payed his premium on time (auto deposit) and never lapsed his insurance. Neither Farm Bureau or Wells Fargo informed me (the owner) of the change in policy. Wells did not assign another insurance to cover the collision for this lien. My son had an accident and found out that he was not covered. Wells Fargo said that they do not require coverage for collision. I found this to be interesting because I signed a contract (Wellls Fargo and NC Farm Bureau) at the dealership requiring coverage. Both parties say I a responsible for the damage of my vehicle and the lien.
1 ANSWER
4 Awards
The insurance company only has to send one notice to one address, which I assume your son received. They do not have to send separate notices to both owners if the two owners have separate addresses. It's impossible to be certain with reviewing the contract that you actually signed, but the standard auto financing contracts say it is the owner's responsibility to keep insurance, and that the lender at its sole option can purchase signle interest coverage. Notice I said option. The lender is not required to purchase insurance when full coverage lapses. The standard financing contract says IF there is insurance, the owner must allow the insurance proceeds to benefit the lender. You and your son are responsible for both repairing the car and continuing to make the required loan payments. Neither the insurance company or the lender did anything wrong here, in my opinion. You sould take all of the paperwork to an attorney for a specific, personalized consultation.
Answered on Aug 25th, 2022 at 8:19 AM
This is general legal advice only. You do not have an attorney-client relationship with Attorney Lynn E. Coleman without a signed retainer agreement and payment of any applicable fees.