Insurance Tacked onto my loan

[ziploc]

I previously owned a boat and during the process of selling it I lost track of the yearly insurance believing that I had renewed it...but I didn't. That aside, my lender tacked on $5000 dollars to insure the vessel. I ended up selling the boat 5 months later and paying the loan of in FULL.

My question is am I entitled to any of that $5000 back since I only owned the boat for 5 months after. Should I be rebated the remaining 7 months of insurance...I believe it was for a year and not the life of the loan. (or what would it normally have been?)

Please advise

Thanks

Ray

 

[CIAA]

ziploc,

It would seem that you would be entitled to some refund;however, you should examine the insurance policy or certificate of insurance along with any related documents.

It sounds as if this may have been what is called "force placed insurance." In years past there has been a lot of scrutiny and regulation of this type of product because of possible lender/insurer abuse. The coverage was being issued for 1 year, but the premium was being financed over the entire term of the loan and added back to the loan payments. As a result, each year the debtors monthly loan payment substantially increased to the point that loan payments for many became unsustainable. I believe most, if not all, states changed the rules so that the insurance could only be financed for the term of the insurance, thereby allowing for the debtor to realize a reduction in monthly loan payment if they obtained their own outside insuranc coverage.

 

[ziploc]

Thank you for Replying...and so quickly!

I guess the only question I have is what should I do. I am at a bit of a loss.

Thanks Again

Ray