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Every once in a while, we get involved in a case with a client who had their finance company purchase car insurance for them. Usually, it's a high loan risk or person who didn't come forward with their own insurance and the bill arrived for the insurance that the loan now also covers. It's usually very expensive and it called "insurance". But, is it Minnesota Car Insurance?

But, an accident happens and guess what? It only covers the car. Actually, it may not cover the whole loan. It has no other protection whether it be liability, no fault , UM or UIM. The person for all intents and purposes has been paying for nothing in personal protection.

How this coverage is legal in Minnesota is still beyond me. Seems to me the law requires basic coverages with any insurance policy, so how do these car coverages get around that? Looks like poor governmental oversight. When you look at how expensive the fake coverage is, the person could have bought solid protection and often for less.

These policies are bad . Make sure you don't have one.


  1. Gravatar for Leigh Rachel

    This is very helpful information. While it's hard to believe someone would think they could have a car without carrying car insurance, I guess you could easily get caught in the trap from the financing company. I blogged about your info, thanks!

  2. What happens is they let it lapse or they don't get the information to the financier, then they get a notice saying that insurance has been purchased , and always think that they have coverage. It's part of the loan, so other then the increased payment, they figure everything is OK. I'm positive they give the information to the police, thinking it's good. Problem is that it's not and I have no idea how they can sell it as insurance in Minnesota. Thanks for reading and the comment.

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