Legal Question in Civil Litigation in California
Liability for insurance added by lienholder
I was notified by the bank that issued my car loan that they did not have current insurance information so they were going to adjust my payments to include insurance for the car. I did in fact have insurance, so I sent them a copy of my current insurance policy. Asking that they call me if they had any further questions. They never called so I continued paying my normal payments. Several months later they sent me a notice stating that my car payments were late because I wasn't paying the additional money for the insurance.
I once again sent them all my insurance policies for that year. Once again I heard nothing. Then they sent another late notice, once again for the insurance money. So I contacted them and asked if I could just pay off the balance of the loan which according to my records should be $1500. At which time they claimed that my insurance was insufficient and that it would cost me $4000 to pay off the loan because they were charging me for insurance.
I am not sure what to do. Is this legal? Am I liable for the insurance charges?
2 Answers from Attorneys
Insurance Rip-Off
The short answer is that you are not liable for car insuranceso long as you had a policy in effect for the duration of the loan period.
This is becomming a common practice for lenders to "rip off" the lendees by adding insurance onto a loan balanceeventhough the lendee had a policy in effect at the time.
You have several choices:
1. Hire an attorney and file a suit against the lender.2. Take the lender to small claims court.3. File a complaint with the Attorney Generals Office4. File a complaint with the Department of Corporations (if the bank is governed by the DOC)5. Do any combination of the above.
GOOD LUCK!============================================================If applicable to this message: "This transmission does not create an attorney-client relationship. I will not be representing anyone without a written agreement signed by all parties. Answers to questions are for general information only and should not be construed as legal advice in any particular jurisdiction. If you need legal advice for a specific legal problem seek the services of a knowledgable attorney in your area or locale."=============================================================
Auto Financing and Insurance
I would need to review the file to be certain, but from your description it sounds like your lender is acting illegally.
As Mr. Drescher points out in his fine response, you have several options available to you which do not involve court action. If you choose to file suit, you may have an excellent claim for fraud which can lead to punitive damages.
Feel free to contact me to discuss this matter further.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
