If you are making loan payments on a car but never drive it do you still need insurance?

Answer

Yes, particularly since your lienholder (ie, the bank) considers the car collateral for your loan, and would expect you to take care of that collateral.

Also, many things can happen to a car besides being involved in an accident on the road. It could be seriously vandalized (like stolen or torched), or involved in a major hail storm, or the garage it's sitting in could burn down (homeowner's coverage wouldn't pay for the vehicle, just the garage).

Then there's the possibility that someone in your household might get ahold of the keys, go joy-riding, and run into another car. As the owner of the vehicle, you would be expected to carry liability coverage (you wouldn't have liability if, say, the car was stolen and the thief hit another car).

Also, if the bank finds out that you're not carrying insurance on the car, they can -- and probably will -- "force" insurance on it. This is very, very expensive and will be added to your loan payments.

Answer

You should be aware that any insurance a lender adds to the loan will protect nothing except their precious investment.

In other words, like he said if someone in your household goes joy riding and all that's on it is comprehensive/collision you are still LIABLE for the other persons injuries or damages.. to a degree.

First answer by Melinda Miller. Last edit by Matt. Question popularity: 89 [recommend question]