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Do I need liability coverage if I have a car loan?
I don't want to get car insurance if I don't have to. If I take out a car loan, will I need to get liability coverage for the vehicle?
Jim Donaher · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Typically, the answer is yes. In fact, auto lenders require borrowers to have
liability
, collision
, and comprehensive
coverage as a term of the loan. This full coverage protects the lender as the owner of the vehicle, and it protects you as the driver from the financial ramifications of accidents and other mishaps that can cause injuries and damage to property. Liability coverage specifically pays for property damage and injuries to other people in accidents that you cause. It can also cover lost wages or legal fees if an injured person files a lawsuit against you.
View full answer
- Gregory R.
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