Legal Question in Insurance Law in California

Re: Liable for loan?

Sadly, it sounds like you are liable here. Lenders are not required to insure vehicles at their expense, and in fact most lenders require the buyer to provide such insurance as a condition of getting the loan. Your son's failure to insure the car was probably a breach of the contract (and, if he carried no liability coverage, a violation of the law).

The lender provided your son with funds and is entitled to expect repayment, regardless of what happens to the car. Your son is still obligated on the loan and, if he does not make the payments, the lender can look to you for payment and can report any failure to make such payments to the appropriate credit reporting agencies. This is why people should be very careful about cosigning loan papers.

Your only other recourse here is against the thief, but thieves tend not to be reliable sources of repayment, especially while they are in jail. The court may have included victim restitution in the thief's sentence, but these payments will be vey slow in coming if they are made at all, and the lender is not required to await such payments.

Sorry I can't be more encouraging but, unless there is something unusual in the loan documents, you are on the hook.

Re: Liable for loan?

Lenders generally carry a "blanket" policy on cars

just for this kind of a situtation. You have to

demand the lender inform you about their insurance

coverages.

You should consider if someone is responsible for

the vehicle being stolen - was it taken from a parking

lot, or an apartment house, where it should have

been secure?

You both owe the loan company for the vehicle, but I

am surprised the loan company allowed it to be sold

and driven without first having some proof of collision

or comprehensive property damage insurance. Was

there supposed to be insurance?

It sounds like your son was a minor - so is it possible

that your own auto insurance also covered this auto?