Some states require financial institutions to take out vendor's single interest insurance on financed property. For example, a bank would have to have this insurance on a car that they finance to somebody (in addition to the purchaser's auto insurance coverage) so that in the event the car is totaled without insurance, the bank can still collect money equal to the value of the car.

Does anyone know if VSI insurance coverage is mandatory in North Carolina? I googled and got nothing, and the DMV is giving me the runaround. If you know the name/contact info of somebody that would be qualified to answer this that would be great too. Thanks for the help.

2/19/2007 8:28:07 PM

Isn't this the point of why you have to collision insurance on a financed vehicle?

Why would they require both collision & this VSI?

2/19/2007 10:23:55 PM

I dunno, but for example, New York requires that all financed vehicles are covered by VSI. This would be a huge help to my friend that totaled his new car right after a lapse in insurance. Please hold the lectures, I've heard it all already.

2/19/2007 10:31:09 PM

I don't know if it's required in NC. It's useful for the lenders to have this in case your in a situation where the insurance company will not cover the damage. For example, if you damage your car on purpose, or if you knowingly let a drunk person drive your car.

2/20/2007 7:52:59 AM

Quote :

"my friend that totaled his new car right after a lapse in insurance"

hahahahaha

2/20/2007 8:03:23 AM

Quote :

"in the event the car is totaled without insurance, the bank can still collect money equal to the value of the car."

I think in NC this is called a lawsuit...

2/20/2007 8:25:51 AM

I think this is where your friend is fucked. In most loans part of the agreement he signs says he will maintain an insurance policy on the vehicle. In fact most banks won't even give you the loan until you have insurance on a car you haven't even bought which is kind of retarded thinking about it but it's how it works. (That applies to used cars not necessarily new).

HOWEVER, your insurance company is still required to pay out during a grace period. I don't know the ins and outs of that specifically but I know that when I was 18 and I totalled a honda accord the insurance had just lasped (we didn't know) because we hadn't gotten a bill, but Allstate was still required to pay for the damages.

At this point listen to what people are saying. Consult a lawyer. Nuff said. Noone on here, myself included can honestly tell you the law. That's what lawyers are for.

2/20/2007 8:29:50 AM

I know someone whose car was totaled while he had insurance but the insurance company gave him less than he owed the bank.

2/20/2007 5:24:16 PM