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Does Navy Federal Credit Union require full-coverage auto insurance on all of its car loans?
I'm financing a new car through Navy Federal Credit Union. The loan officer told me I need to have full coverage, which is far more expensive than the liability I had on my old car. Is it normal for lenders to ask for full coverage on an auto loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
The loan officer is correct. Financed cars typically require full coverage
car insurance
, which includes:The reason that Navy Federal and other lenders require this is to protect their collateral (the car). If you didn’t have it and the car was totaled, you could easily walk away and the lender would have to eat the loss.
For this reason, you should always budget for full coverage and check
car insurance quotes online
to make sure you get the best rate possible.View full answer
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