Is it bad to go Through a Bank for car Insurance?
Is it bad to go through a bank for car insurance? It is bad to go through a bank for car insurance in most cases because it will limit the policy options you get to choose from. Luckily, many private insurance companies will be willing to give you auto insurance quotes for full coverage at around $1,245 a year. When you shop around on your own instead of going through your bank, you have more savings and policy options.
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UPDATED: Dec 29, 2021
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- Getting insurance through your bank may limit your options
- Private insurers are willing to insure financed vehicles
- Shopping around will allow you to get better prices
Is it bad to go through a bank for car insurance? If you choose to go that route, you may have to pay more for insurance and your policy options may be limited. Many private insurance companies are willing to offer you complete coverage for your financed car.
However, you should be aware of the factors that affect the price of car insurance, which can quickly cause your total coverage rates to increase significantly.
Now that you know that buying car insurance from a bank may be not the best idea, enter your ZIP code into our free quote tool to see what you could pay for a policy today.
Is it bad to go through a bank for car insurance?
It’s only a bad idea if you’re wanting less expensive auto insurance from specific companies you know. Some banks may partner with insurance companies and only offer specific policy types that don’t fit your situation.
It’s just as easy to apply for auto insurance at an insurance company that you like. If you’re financing a car through the bank, they will require that you have insurance from any company, not that you necessarily have insurance through their partners.
This means that even if you’re financing with a bank partnered with Nationwide insurance, you can still look for auto insurance quotes at other providers.
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Do you need car insurance coverage when you finance a car?
How much insurance do I need for my car? If you’re financing a car, there’s a good chance that you’ll have to have full coverage on your vehicle for the length of the policy. This is because the lender technically owns the car until you pay it off.
Full coverage is a combination of coverage types that will help protect your vehicle from various hazards. Full coverage includes policies like:
With these policy types, the insurance will protect the bank’s investment against a variety of damages or the loss of your vehicle.
Once the vehicle is paid off, you are free to minimize your insurance as much as you’d like. However, it’s important to remember that you still need to keep the minimum amount of liability coverage required in your state.
What insurance coverage is required when financing through a bank?
Each bank may decide its lending policies, but a vast majority will require that you have full coverage auto insurance. Full coverage car insurance will cover damages from vandalism, theft, collision, and weather.
The cost coverage can be more than any of the policies due to the level of risk. Therefore, full coverage is more of when the insurer will have to pay than if.
Can a bank change your insurance when lending you money?
The benefit of getting insurance with another company outside of your bank is being able to pick your provider independently. However, you can never be sure how your options will change when your bank has access to your insurance policy because you’re insuring through the bank.
How much does insurance cost when insuring through a bank?
In 2020, the average cost for full coverage auto insurance was around $1,245 a year, according to the Insurance Information Institute. This works out to almost $104 a month.
Since this cost is the average, you may have to pay more if you have a high-risk record. Try to lower risk by improving your credit-, criminal-, and driving history. If your vehicle is more valuable, it can also cost much more to insure.
Going Through a Bank for Car Insurance: The Bottom Line
Now that you know it is bad to go through a bank for car insurance, you can look for a policy at a private insurer. Many insurance companies will give you auto insurance quotes on your financed vehicle. You must meet your bank’s minimum insurance requirements.
Since you know it is bad to go through a bank for car insurance, enter your ZIP code into our free quote tool to see what you could pay at another insurer.