What Happens When You Go Through a Bank for Car Insurance?

You can get auto insurance from an insurance company or an insurance agent as a car owner. However, what about through a bank? Do banks offer auto insurance? Read on to find out more!

When to Get Auto Insurance Through a Bank

You can get auto insurance through a bank when the bank is financing your car. In other words, you get auto insurance from the bank when you apply for a car loan with them.

When you finance a car, the bank buys the car on your behalf while you make payment to them with interest over time. With each payment made, you increase your car ownership and the amount you owe. If such is the case, you’d need to name the bank in the policy.

Components of a Full Auto Insurance Coverage Plan

Full auto insurance coverage comprises liability, comprehensive, and collision coverage.

  • Liability coverage covers injury and damage done to others and their property. It covers the damages you are responsible for.
  • Collision coverage covers any damage to your vehicle after a collision, regardless of who the at-fault driver is.
  • Comprehensive coverage covers non-collision damage such as theft, vandalism, damage from extreme weather, damage from falling objects, fire, hail, and flood.

Another kind of coverage to consider is gap insurance. It covers the difference between your payoff and insurance settlement if the vehicle is totaled and you owe more than the value.

How Much Does a Full Auto Insurance Plan Cost?

The cost of full auto insurance is the same whether or not you purchase it or are financing it. The only difference is that you tend to pay more since you need full coverage, not the minimum state coverage. Auto insurance costs differ from state to state and from company to company.

Other factors may also dictate your insurance cost. Factors such as:

  • Bundling your insurance
  • Good driving record
  • Paying annually rather than monthly

Getting an Auto Insurance Policy for Financed Car

The loan company (or bank) may want you to list them as a recipient on your auto insurance policy. Most of them require you do that before you receive the loan. When you get the quote, you are required to inform your insurer of having a lienholder on your policy. Also, your insurer will notify the recipient of any changes you make to your policy.

You need to maintain the insurance until the car becomes yours fully. Otherwise, you may lose your car loan. A few months before completing your car loan, you are required to shop around for the best coverage rates.

Getting auto insurance through your bank is not a very good idea. It limits your coverage options, unlike buying insurance from an insurance company. You need to shop around and compare quotes to get better prices. At ISU Wissink Agency, we have the right kind of auto insurance for you when financing your car. Our team of experts is also available to help you through the process. Contact us today to get a quote for free!