Providing proof of car insurance coverage to a bank on a car loan is not as hard as it seems. Be prepared when seeking a loan for a car to provide this proof. In many states, an insurance coverage card is issued by insurers to show that you have coverage. This card lists the company that you are insured by, policy number, telephone number and the address of the insurance company. The banker or the auto dealer can easily verify your car insurance policy by phoning the insurance company. Of course, he will also require that the insurance company send a written assurance that you do indeed have car insurance coverage with that company, showing the bank as lienholder on the title of the car. This also necessitates that you call the insurance company and add the car to your coverage. Without this, the insurance company will not send the lender written verification of your car insurance policy.
If you do not have a card for proof of insurance, you may get all the information you need off of the declaration page of the car insurance policy. Take a copy of this with you when buying a car so that the lender may get all of the necessary information. Again, the lender will want to verify your coverage and get written verification, so be sure and call your insurance company.
If you have an agent and know how to contact him, this may be enough to get the insurance coverage verbally verified. The rest of the process is the same, and written verification also needed.
Another thing to keep in mind is that the lender will want to know if you have full comprehensive insurance coverage on your car. This coverage protects the lender in case you have an accident that causes damage to your vehicle. Most states require you to have liability coverage to protect other drivers, and many people with older cars do not carry comprehensive coverage. If this is true in your case, you need to arrange for comprehensive coverage before buying your car. This coverage is transferrable to your new vehicle and ensures that there is no danger of the lender losing any money during an interim period. If you have just taken out comprehensive coverage, take a receipt for the car insurance policy that you have just purchased to the lender, or have the receipt faxed to them. Remember, that this is very important not only to the lender, but to yourself as well. Without proof of insurance, you will not be allowed to take the car home with you, thereby delaying the satisfaction of having purchased a new car.
