Can a Mortgaged Vehicle Purchase Its Own Insurance?
2 Answers
Mortgaged vehicles can purchase their own insurance and undergo annual inspections. Here is the relevant information: 1. Conditions for purchasing insurance for a mortgaged vehicle: Whether the insurance for a mortgaged vehicle can be purchased under the buyer's name depends on whether the vehicle has been transferred, as auto insurance is based on the name on the vehicle's registration certificate. The subject of the insurance is the vehicle, so the policyholder's identity is irrelevant. If the mortgaged vehicle is transferred from the original owner to the new owner, the insurance policy must also be transferred, or the existing policy can be canceled and a new one purchased—except for compulsory traffic insurance, which cannot be canceled. If the insurance is not transferred, in the event of a claim, the original owner's identification documents will be required to assist in completing the claim process. 2. Real-name system: The real-name system means that when purchasing auto insurance, the insurance company will verify the authenticity of the payment account information to ensure it matches the policyholder's identity, while protecting consumers' right to choose and right to know.
Last time I bought a repossessed car, I specifically inquired about insurance. Bank-financed vehicles can indeed be insured, but there's a hurdle to clear: you need to provide the vehicle registration certificate mortgage proof and a copy of the loan contract when purchasing insurance. My insurance agent handled it back then, explaining that the policy in such cases includes special beneficiary clauses. Although the policy is nominally under your name, the vehicle damage insurance portion typically specifies that claim payments will first be used to repay the outstanding bank loan balance. After driving a financed car for five years, I've found that every time the insurance comes up for renewal, the insurer re-verifies the mortgage status. The most cumbersome part is having to send the loan institution a copy of the annual inspection certificate and compulsory traffic insurance policy after each vehicle inspection.
