Liability Insurance on financed car?

[Red]

Some guy at my work (age 20) is financing a new Cougar, and his full coverage insurance was $180/mnth... he doesn't want to pay that so he called his insurance and they gave him liability for $75/month. I told him that I didn't think insurance would insure a financed car and he said all you need to do is show that you have full coverage when you get the loan, you can walk out of the bank and lower it to liability. He said he understands if he gets in a wreck and it is his fault, he has to pay for his car, but he said that is the risk he wants to take to save over $1200/yr in insurance. I didn't think it was possible to get liability on a financed car.

 

[Viper GTS]

He's almost certainly breaking his financing agreement.

Viper GTS

 

[ElFenix]

yeah, he'll be laughing when the bank repos his car tomorrow

 

[Red]

He says he has had it for two months.

 

[Viper GTS]

Originally posted by: Redhotjrm
He says he has had it for two months.

When he gets caught he will be in deep sh!t.

If he wanted to have an unsecured car loan, he should have paid off his car loan with a balance transfer onto a CC.

Viper GTS

 

[Lola]

trust me, in the end, it is him that will be screwed. i have had this happen to customers.
either he will get into an accident and it will not be covered (BIG MESS) or, ford(or whoever he has it finacned through) will randomly call insrance co's to verify coverage. if he dosent have full coverage, they may make him get their really expensive insurance or when he finally pays off the loan, they may make him pay for extra insurance from the time he took it off til then.

 

[dman]

Originally posted by: ActPrincess
trust me, in the end, it is him that will be screwed. i have had this happen to customers.
either he will get into an accident and it will not be covered (BIG MESS) or, ford(or whoever he has it finacned through) will randomly call insrance co's to verify coverage. if he dosent have full coverage, they may make him get their really expensive insurance or when he finally pays off the loan, they may make him pay for extra insurance from the time he took it off til then.

I know the insurance company sent the financing company notices when my insurance was cancelled. They failed to notify them that I switched providers. Thus, I suspect the insurance company (if it's a reputable one) will likely notify the title holder that it has lowered the coverage and then they will send him a warning letter or worse.

If not, good luck to him.

 

[MrWizzard]

:Q He is in trouble, I work in a insurance brokerage, and whenever you change your policy, they send out a copy of that change to the people on the policy, and the people who financed his car have to be listed as a loss payee or additional insured, just give it a couple days, unless his agent is doing something illegal/sneaky he is about to get a dose of reality