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Liability- who insures lien holder has this

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smallpurpleants

Junior Member
Hello, I am in Texas and trying to see if the lien holder is liable to have insure that the driver has insurance on an auto. I have been told by my brother and by a banker in TX that this is true and the lien holder must ensude this type of insurance if the driver fails to fullfill this. Can someone please help me with what law/ statute this is or if it si even true. Thank you.
 


teflon_jones

Senior Member
It's the responsibility of the borrower to get coverage on a vehicle pursuant to the terms of the lien. If they fail to do this, the lien holder is not responsible for insuring the vehicle. Under many (if not most) liens, this constitutes a breach of contract and the lender can seize the vehicle.
 

racer72

Senior Member
In many cases, the lender will purchase insurance that covers the loan only and the borrower will pay for this insurance. This insurance does not provide coverage to the driver in any way and is not a substitute for the state mandated coverage. Many folks have gotten into some very serious financial binds because they think this insurance covers them, it does not.
 

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