My wife’s car was reposessed. Its on a policy with mine. I was thinking I would call the insurance company and cancel but then I thinking ‘what if something happens? is there any way I would be liable? Should I keep the insurance?’
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Since this is probably going to involve legal opinions, let’s move this to our opinion forum.
Moving thread from General Questions to In My Humble Opinion.
I am a licensed Independent Insurance Agent in Georgia, so the following is based on Georgia law and the laws in your state may vary. With that said, I think it is sound advice that would be applicable in most, if not all, states.
You should wait until the lender (bank, finance company, etc.) confirms in writing that the car has been repo’d. At that point, they assume possession and responsibility for the vehicle. If the car is/was damaged during the physical repossession or while it being stored at the repo facility, you could be held liable. The lender will pursue your wife for any difference between the loan payoff and the amount they receive for the car at auction. But that balance could be much larger if the car is damaged before the bank receives it.
I agree with Beelzebubba. You should be able to obtain a title release immediately if the lender already has possession, though. Call the lender.
Also, if you don’t continue to carry it on your insurance, the bank will impose their own insurance on it, and charge your wife for it, at probably a much higher rate.
The bank reposed the car. They have the car so they can not require you to insure the car.
They can until title passes.
^^ What he/she said.
I’ve been through a repossession and learned many things I really wished I would never have had to in my life.
The biggest lesson was: never cosign a loan with a relative.
Sadly, many people have learned the same lesson the hard way. My sister asked me to cosign with her for a car during her divorce. My job as an Insurance Field Auditor requires that I have good credit. The firm I currently work for checks everyone’s credit annually and they can check as frequently as they choose. If I co-signed a loan and the borrower defaulted, I would either be forced to make the payments or have the repo show on my credit report.
I told her that I simply couldn’t do it. But I also gave her a down payment of $1500 as a gift. I don’t LOAN money to friends or family because nothing can strain or damage a relationship quicker! So if I give someone money when they need it, I give it as a gift that I never expect to see again.
Thanks All! I will keep the insurance on the vehicle till I get title release.