Can i get liability insurance on a financed car?

Yes, you can typically get liability insurance on a financed car. Liability insurance is a basic type of coverage that helps protect you financially if you cause an accident that results in injuries or property damage to others. It’s often required by law and by financing institutions when you’re leasing or financing a car.

When you finance a car, the financing institution (such as a bank or credit union) becomes a lienholder on the vehicle. This means they have a financial interest in the car until the loan is paid off. As a result, they usually require you to have certain types of insurance coverage, including liability insurance, to protect their investment in case of accidents.

Liability insurance typically includes two main components:

  1. Bodily Injury Liability: This covers medical expenses, lost wages, and legal fees if you’re responsible for injuries to others in an accident.

  2. Property Damage Liability: This covers the cost of repairing or replacing other people’s property (e.g., their vehicles or structures) that you damage in an accident.

However, it’s important to note that liability insurance alone might not cover damages to your own financed car. For that, you might need additional coverage such as comprehensive and collision insurance, which protect against theft, vandalism, and damage from accidents.

Always check with your financing institution for their specific insurance requirements, and consider discussing your coverage needs with an insurance professional to ensure you have the right insurance plan to meet both your legal obligations and your car’s financing terms.

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