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  1. #11
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    I still want to know what state this is in. In my state, the insurance information is on the registration so you can't drive it off the lot without proof of insurance. But in other states, insurance is optional to start with. So what liability the dealer has will be dependent on state law.

  2. #12
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    Oct 2016
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    Quote Quoting llworking
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    I honestly thought that car dealers, when they arrange the financing, are responsible to the bank to make sure the car has full coverage? Isn't that something that the bank expects them to verify?
    The dealer may have some duty to the bank. That does not relieve the buyer from their responsibility to the bank nor does it give the buyer a cause of action against the dealer.

  3. #13
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    New Jersey
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    Quote Quoting pg1067
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    "Full coverage" isn't an insurance term. It's a colloquialism that generally means that the insured carries comprehensive and collision (and maybe also UM/UIM) in addition to legally required liability coverage. One can purchase a policy that provides only liability coverage, and I've never heard of someone having comprehensive coverage without having collision coverage (although I suppose it's at least theoretically possible).
    My policy for my motorcycle is liability and comp only, no collision. That's why I thought comp was always included.

    Quote Quoting PayrolGuy
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    The dealer may have some duty to the bank. That does not relieve the buyer from their responsibility to the bank nor does it give the buyer a cause of action against the dealer.
    Right, but it may give the bank the right to recover its loss if that dealer and bank hold a contract together. If the OP had his own financing in place, then the bank may just be beat.
    I'm not a lawyer, but I did stay at a Holiday Inn Express last night.......

  4. #14
    Join Date
    Jul 2018
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    Quote Quoting llworking
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    I honestly thought that car dealers, when they arrange the financing, are responsible to the bank to make sure the car has full coverage? Isn't that something that the bank expects them to verify?
    I can't speak intelligently about the expectations of the thousands of banks that provide financing for auto purposes.

    As far as the existence of a legal duty to verify insurance, any such duty would have to be imposed to statute, common law or contract, and I'm not aware of any statute in any jurisdiction or any case authority that would impose such a duty. As far as a contractual duty, I doubt many banks have any sort of direct, contractual relationship with any auto dealers. It's certainly possible that contracts between auto manufacturers and dealers impose an obligation as it relates to financing provided by the manufacturer's financing division, but such a duty would not run to any other lender, and the existence of such a duty would be of no benefit to a purchaser of a vehicle. Keep in mind that, as far as the lenders go, it doesn't make much difference since they all have their own insurance that provides coverage in the event a customer fails to obtain or carry proper coverage.

    Quote Quoting cbg
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    I still want to know what state this is in. In my state, the insurance information is on the registration so you can't drive it off the lot without proof of insurance. But in other states, insurance is optional to start with. So what liability the dealer has will be dependent on state law.
    There are only two states (NH and VA) that don't have mandatory liability insurance laws, but that's neither here nor there as it concerns dealer liability to anyone for verifying that a purchaser has proper insurance.

    I don't really follow what you're saying about "the insurance information [being] on the registration." In my state, when you buy a new car, you receive a temporary registration certificate and temporary license plates. You receive the actual plates and registration certificate in the mail 2-3 weeks later. If you're buying a used car, you'll get the vehicle with the existing plates and a temporary registration certificate and will get the regular certificate 2-3 weeks later. I assume paperwork and what-not varies from state to state, but there's no state that has a law that imposes a duty on car dealers that runs to the benefit of purchasers to ensure that the purchaser has whatever insurance is required by law or pursuant to the purchaser's financing contract.

  5. #15
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    Jan 2006
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    Quote Quoting pg1067
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    I can't speak intelligently about the expectations of the thousands of banks that provide financing for auto purposes.

    As far as the existence of a legal duty to verify insurance, any such duty would have to be imposed to statute, common law or contract, and I'm not aware of any statute in any jurisdiction or any case authority that would impose such a duty. As far as a contractual duty, I doubt many banks have any sort of direct, contractual relationship with any auto dealers. It's certainly possible that contracts between auto manufacturers and dealers impose an obligation as it relates to financing provided by the manufacturer's financing division, but such a duty would not run to any other lender, and the existence of such a duty would be of no benefit to a purchaser of a vehicle. Keep in mind that, as far as the lenders go, it doesn't make much difference since they all have their own insurance that provides coverage in the event a customer fails to obtain or carry proper coverage.



    There are only two states (NH and VA) that don't have mandatory liability insurance laws, but that's neither here nor there as it concerns dealer liability to anyone for verifying that a purchaser has proper insurance.

    I don't really follow what you're saying about "the insurance information [being] on the registration." In my state, when you buy a new car, you receive a temporary registration certificate and temporary license plates. You receive the actual plates and registration certificate in the mail 2-3 weeks later. If you're buying a used car, you'll get the vehicle with the existing plates and a temporary registration certificate and will get the regular certificate 2-3 weeks later. I assume paperwork and what-not varies from state to state, but there's no state that has a law that imposes a duty on car dealers that runs to the benefit of purchasers to ensure that the purchaser has whatever insurance is required by law or pursuant to the purchaser's financing contract.
    apparently Michigan does impose such a requirement when the dealer issues a temp registration.

    https://www.michigan.gov/documents/s...3_186042_7.pdf

    Check 3.93. That is in regards to only the minimum level of insurance required by law; liability basically. I suspect the dealers obligation, if any, in the case at hand is similar.


    i haven’t checked any other states.


    op needed to read his finance contract. That is where he would find he is required to carry collision. It would then be his responsibility to ensure he had proper and adequate coverage. He didn’t. Dealer owes op nothing.

  6. #16
    Join Date
    Jun 2014
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    3,144

    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    Why would anyone not verify with their insurance that they are covered ? When I was in high school a nun told us,what the word assume means. When a person assumes something. they make a a** out of themselves and the other person.

  7. #17
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    Massachusetts
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    In my state, we are not provided with an insurance card. Your auto registration contains your insurance information. You have to provide the insurance information to the RMV when you pick up (or renew) your plates. If you don't have the insurance, you don't get your plates. The insurance information is printed on the registration itself. Since you can't leave the lot until you have the plates, and you can't get the plates without the insurance, the dealer will not allow you to drive the car off the lot without that proof. Rarely do you get temporary plates unless you have vanity plates of some sort. I've had the same plates through four cars and two different insurance companies, but I don't get the renewal stickers or the new registration without the insurance company's verification that I have insurance.

  8. #18
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    Jan 2006
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    Quote Quoting cbg
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    In my state, we are not provided with an insurance card. Your auto registration contains your insurance information. You have to provide the insurance information to the RMV when you pick up (or renew) your plates. If you don't have the insurance, you don't get your plates. The insurance information is printed on the registration itself. Since you can't leave the lot until you have the plates, and you can't get the plates without the insurance, the dealer will not allow you to drive the car off the lot without that proof. Rarely do you get temporary plates unless you have vanity plates of some sort. I've had the same plates through four cars and two different insurance companies, but I don't get the renewal stickers or the new registration without the insurance company's verification that I have insurance.
    With both of my most recent new cars I was given a temp plate because I didn’t trade in anything . In Michigan, with Michigan residents, the dealer procures the plate so they issue a temp registration. When a Michigan resident buys in Indiana, the dealer issues a temp plate and the buyer goes to the SOS (our version of most states DMV) and purchases an actual plate there. I had to provide proof of insurance (legal minimum only) before they would issue the temp plate.

  9. #19
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    Massachusetts
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    One rarely sees temp plates in Massachusetts. I won't say never, but it's unusual. In the 36 years I've lived here I've never once been issued a temp plate regardless of what I was doing with regards to a previous vehicle.

    But my whole point is that different states have different procedures.

  10. #20
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    Jul 2018
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    Default Re: Bought Brand New Car and Dealer Didnít Verify Insurance

    Quote Quoting cbg
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    In my state. . . .
    That sounds pretty atypical. Of course, the OP apparently had liability insurance, so this wouldn't have been an issue even if he/she is in MA (or any state with a similar system). No state requires collision or comprehensive coverage.

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