Does Navy Federal require full coverage on a financed car?
I just bought a 2007 VW eos. I had it financed through navy federal, the day I bought the car the dealer made me get insurance before I drove it off the lot. He told me just to get liability because that's all I could afford. Unfortunately I just totaled the car, and obviously my USAA insurance won't pay for the damage done to my car. So I was woundering if navy fed requires full coverage on their financed cars. And if so, why didn't they check my policy and notify me. Cause now I'm stuck with a car I can't drive, and can't sell (navy federal requries that I keep the car so the title can be used as collateral). I don't know what to do, its sitting at a impound an hour away from my base in san Diego. I cancan't afford the tow (which insurance isn't going to pay either) and now I gotta store it which I can't afford either... All in all, I just need to know if navy federal requires full coverage so I can see an attorney and get this messed up situation figured out...
Shane A2013-09-02T23:31:17Z
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I have never heard of any loaning institution not needing full coverage insurance when you buy a car. However, I'm not saying that it isn't possible. No matter what anyone says, it is still your responsibility to have insurance. Sure, you got the minimum required by the state, and now you know what kind of problems that causes. You still owe on the loan, they don't care if the car is totaled or not, as long as they get their money. They know they will get their money because they can come after your paycheck.
First. There is no such thing as "full coverage". Second. All lenders require collision and comprehensive coverage. Plus, Your U.S. State will require liability coverage. Third. You are likely covered. Have you notified your insurance company of the accident? Why not?
What does this mean? " obviously my USAA insurance won't pay for the damage done to my car.". Why wouldn't they? Why would you make a statement like that? Sorry if I didn't understand this. Please clarify your question.
Scrap the car. You don't need it. Trust me, once the lienholder finds out what happened they won't want it either. The car is junked, so sell it to a scrapyard.
When anything is used as collateral, the lender usually requires confirmation that it's 'fully' insured before they do the final approval on the loan. They also usually insist on being listed as a loss payee on the policy. How or why they didn't do that when you bought the vehicle is beyond me, you'll have to take that up with Navy Federal.
And do notify them of this, because maybe they had contingency coverage in force for just such occasions. Contingency coverage is for when the primary coverage isn't valid or adequate, and it would cover at least their loss at least partially.
The dealer telling you to just get liability coverage isn't going to help you unless a) he / she was authorized to negotiate on the lender's behalf and b) you got it in writing that Collision coverage was not required. And I don't think that was the case. Dealers and lenders each have their own rules to follow, and don't really get involved in each other's business.
Every lender I have ever heard of requires collision coverage. How you got the loan without out is a mystery.
I wonder if that is some kind of benifit for military personell that they waive the full coverage requirement? Or maybe it was included in your loan payment? Give then a call and tell them what happened, they may have some good info for you.