Auto loan bought insurance for me?

I traded my car and forgot to contact my insurance to switch the vehicle information. I can’t provide an excuse; I just forgot. The coverage stayed on the car I “sold” for a couple weeks before I realized that I didn’t provide the new info. 

I was told by the geico representative that she was going to be able to backdate it. But then when she attempted to do it, she said she cannot change the date to be one that was prior to us talking. 

Because there is a gap between the insurance, my auto loan provider decided to purchase a loan for me and gave me the obligation to pay a little more than $600. 

Is there any way around it or am I stuck with a life lesson? Can I just decline the insurance for that time period if anything and just leave the gap? 

11 Answers

  • Anonymous
    2 months ago

     What they did is called "force-place". Its a last resort and they usually only do that if you ignored them and your insurance company for weeks.

    However, if you sold the car then the policy should be prorated to the time you told them or the time the old car was paid off.  That should lower the $600.

    But it would go toward your loan, they won't send you cash.

    To make things worse, it will increase the cost of your insurance for years because you went without for a period of time. That means you are a greater risk.

  • 2 months ago

    There is no way around it.  You cannot decline to have insurance when you have an auto loan.

  • 2 months ago

    You're stuck with the bill on that one.  Call it a lesson learned.

    Your loan provider didn't purchase insurance coverage for you, they purchased it for them and sent you the bill.  Had anything happened to your vehicle while it wasn't properly insured, the insurance they purchased (called lienholder's contingency coverage) would have only covered them.  And they made you pay for it.

  • Anonymous
    2 months ago

    You MUST provide insurance to keep the loan. You can get it yourself or the loan company will. No back dating. You lost that amount.

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  • Scott
    Lv 7
    2 months ago

    An expensive lesson is to be learned here. The terms of your loan require you to maintain full insurance coverage until the loan is paid in full. You can't choose to opt out of insuring your vehicle. Gap coverage is not the same as auto insurance. 

  • 2 months ago

    Sorry, pal.  Sometimes lessons are costly

  • ?
    Lv 6
    2 months ago

    You are stuck.  A "gap" in insurance coverage is a very serious thing.  When a financed vehicle is found to be uninsured, the lien holder buys (expensive) coverage to protect their investment.  They then charge the insurance premium to you.  If you don't pay the insurance premium, the car will be swiftly repossessed

  • Anonymous
    2 months ago

    Talk to your loan provider and the insurance co. they set you up with. All we can do is guess. Don't forget to notify the DMV of ANY  changes you make to your policy. If you change companies they won't know that. All they'll see is that the previous policy is inactive and they'll automatically suspend your registration. DON'T FORGET  or that'll be another 500 out of your pocket, if not more. 

  • 2 months ago

    Back dating may matter if it is considered a lapse in coverage.

    You agreed to have the auto lender add insurance if you didn't. It's in your contract.  Geico is only probably only able to backdate it X dates.  In California, it's 10 days from date of purchase.  If you are in another state, state law may dictate it can't be further backdated.

    That said it doesn't hurt to ask the lender now that you have the insurance coverage in place.  The worst they can do is say "sorry, not able to". 

  • Anonymous
    2 months ago

    First - get a better insurance than Geico.  (cheaper isn't always "better" - it is cheap for a reason)

    Back-dating the dropping of the old vehicle doesn't matter as long as no one tried to make any claims on your insurance.  It is just a little money lost if there would have been a refund for ending the policy early.

    Back-dating the new vehicle shouldn't matter as long as you didn't have any claims during the time frame not covered.

    The insurance should just move from one vehicle to another vehicle without any issues.  YOU have always had insurance even if the policy didn't directly include the exact vehicle you was driving - you need to check with YOUR insurance to find out how long they would have covered a new purchase even if it hadn't been officially reported yet.  There should be some grace period in which they would have covered a new purchase as long as your policy was paid up to date even if you had not directly reported that new purchase yet.  If the grace period they cover is the amount of time you are "gapped" then you MIGHT be able to get a letter from Geico proving you always had coverage and be able to get the policy the loan created cancelled.

    If you can't prove Geico would have covered that gap - then you need to READ YOUR CONTRACT very carefully - if it is in your contract that they can insure the car if you don't have insurance - then you might be stuck with the insurance they picked until the renewal point of that policy.  Of course - that means you need to pay that policy.

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