Q: I NEED HELP WITH THIS

A: Unclear what "legal obligations" to which you refer. By statute, you are required to have automobile insurance. Any other insurance requirements would likely be something to which you agreed by contract. Generally, you have an obligation to comply with your contractual promises, although there are limitations for "unconscionable" contracts, illegal contracts, or contracts that violate public policy.

The lienholder can "dictate" terms or costs of insurance coverage if those powers are part of the bargain that you struck with the lienholder. In general, there is no limit to the terms of the bargain that you strike as long as the contract is not illegal or does not violate public policy.

A: I am assuming that your car loan requires collision coverage and that you don't have any.

If so, the contract will allow the lender to buy such coverage for your vehicle and charge you for the cost. Such policies, called "force-placed" in the industry, are very expensive, much more costly than what an individual would have to pay if buying insurance on your own.

The reason for the cost is that you are assumed to be a bad insurance risk/crappy driver since you don't have your own insurance. The insurance companies charge through the nose for such policies because there are so many claims. The policy covers only damage to the car to protect the lender's interest in the vehicle. It does not give you other coverages like public liability.

Your lender may add the cost to the end of your loan, or demand you reimburse them immediately. Failure to pay the lender for the policy may result in a repo.

A: Without additional details, your question could apply to any number of areas where a lienholder or creditor can impose requirements for insurance for something being financed or leased. In general (subject to state laws), they often do this to the extent of covering loss or destruction of their asset. Good luck

A: Under California law, you are required to maintain a minimum level of auto insurance if you own and operate a vehicle. This includes liability insurance coverage for bodily injury and property damage that you may cause to others in an accident. Failure to carry the required insurance can result in fines, suspension of your vehicle registration, and even suspension of your driver's license.

When it comes to your vehicle, if it's financed or leased, the lienholder has the right to require you to carry comprehensive and collision coverage in addition to the state-mandated liability insurance. This ensures that the vehicle is protected against theft, vandalism, and accidents. While lienholders can mandate the types of coverage you must have, they cannot dictate the insurer you choose or the precise cost of your insurance. However, they may require that your coverage meets specific minimum standards beyond those required by state law.

There are legal limits on how much control a lienholder can exert over your insurance policy. They cannot force you to choose a particular insurance company, but they can require proof that your policy meets their requirements. If you fail to provide proof of adequate insurance, the lienholder may purchase insurance on your behalf (force-placed insurance), which often comes at a higher cost, and you will be responsible for paying the premium. It's crucial to maintain open communication with your lienholder about your insurance coverage to avoid unnecessary complications.