Car Insurance When Your Vehicle is Repossessed
If your car has been repossessed – for whatever reason – you may be concerned with what happens next. Many motorists are particularly concerned with their car insurance. What happens to the car insurance now? How does a vehicle repossession affect auto insurance premiums? Here is what you should know.
You are required to have full car insurance until it’s paid off. If you are leasing a vehicle or making car payments, then you don’t fully own the vehicle. For this reason, it’s wise (and often mandatory) to obtain full insurance coverage. If you can no longer make car payments, then the lender may repossess the vehicle and sell the car to recoup the losses. If you, as the borrower, refuse full insurance coverage, the lender may choose to do so and then pass the costs along to you.
Maintain insurance after repossession. You should keep car insurance on a repossessed vehicle to have full control over the policy you choose. If your car has been repossessed by the lender, then the lender’s auto insurance may apply, and you may be forced to pay a higher car payment. Until the issue is resolved or the vehicle is sold by the lender, aim to maintain your car insurance on the vehicle.
Repossession and the impact on future rates. Repossession doesn’t require a claim to your insurance company because it is a financial issue rather than a liability issue. Generally, this shouldn’t increase your auto insurance rates. However, repossession will impact your credit score, which insurers look at when determining risk factors and premiums. As a result, you may face higher premiums in the future.
Vehicle repossession can be a headache. In general, you want to maintain coverage on the vehicle until it’s sold, and at that point you can cancel coverage. When it comes to finding the right coverage, call the experts at Jack Stone Insurance Agency. We serve Brentwood, Antioch, and neighboring cities in California with reliable and comprehensive auto insurance policies. Open our auto insurance page in a new tab to read on!