Can a bank charge me for insurance toward months that have passed

[sabugirl]

(State of California) A bank that is financing my car requires me to purchase a full coverage insurance policy as soon as possible, but there’s some grace time to shop around (I got a minimal liability policy for the meantime). 2 months later I got insurance that meets the bank’s requirements, but the bank said because my car did not have the appropriate coverage for the first 2 months, they were going to have to apply their personal policy to cover those months. So now I have a bill of $840 ($420/month). CAN A BANK CHARGE ME FOR INSURANCE FOR MONTHS THAT HAVE PASSED ALREADY (I never got into an accident)?

 

[single317dad]

The exact language, word for word, of that original communication (the one that mentioned the "grace period") and your original loan contract (the sections that require you to maintain insurance to protect the bank's investment) are crucial here. Chances are they've got their behinds covered pretty thoroughly, but banks do make mistakes.

 

[Silverplum]

(State of California) A bank that is financing my car requires me to purchase a full coverage insurance policy as soon as possible, but there’s some grace time to shop around (I got a minimal liability policy for the meantime). 2 months later I got insurance that meets the bank’s requirements, but the bank said because my car did not have the appropriate coverage for the first 2 months, they were going to have to apply their personal policy to cover those months. So now I have a bill of $840 ($420/month). CAN A BANK CHARGE ME FOR INSURANCE FOR MONTHS THAT HAVE PASSED ALREADY (I never got into an accident)?

Yes. If your Theory of Insurance was true, Allstate owes me 25+ years of premiums.

 

[sabugirl]

But isnt insurance supposed to cover an investment from future mishaps?
What exactly is being covered by covering 2 months that happened a long time ago? And no accidents occurred during that time?

I am just trying to wrap my head around the concept

 

[Silverplum]

But isnt insurance supposed to cover an investment from future mishaps?
What exactly is being covered by covering 2 months that happened a long time ago? And no accidents occurred during that time?

I am just trying to wrap my head around the concept

The insurance was in force during the two months you were underinsured. You just haven't been forced to pay the bill until now.

 

[ShyCat]

You are reimbursing the finance company for your pro-rated share of their insurance policy that would have covered their loss in those two months.

 

[sabugirl]

The exact language, word for word, of that original communication (the one that mentioned the "grace period") and your original loan contract (the sections that require you to maintain insurance to protect the bank's investment) are crucial here. Chances are they've got their behinds covered pretty thoroughly, but banks do make mistakes.

I wouldnt doubt it. I'm going to have to look into how much time this "grace period" is exactly... it obviously didnt apply at all

 

[Silverplum]

I wouldnt doubt it. I'm going to have to look into how much time this "grace period" is exactly... it obviously didnt apply at all

Do look it up. I'd be shocked if it was longer than a week.

(How long does it take to make some calls, check some internet sites? I could have a vehicle insured within 24 hours.)

 

[Zigner]

The "grace period" is the period in which your EXISTING insurance may cover your newly purchased vehicle.

 

[Zigner]

Do look it up. I'd be shocked if it was longer than a week.

(How long does it take to make some calls, check some internet sites? I could have a vehicle insured within 24 hours.)

I call that and raise you...I could do it within an hour.