Insurance Lapsed on Totaled Car
With Loan Through Capital One

A totaled car question from Skip in Palm Springs, California...

What happens to a Capital One auto loan if the insurance on the car has lapsed and my car was totaled due to an accident?

Does Capital One have their own insurance for this situation?

Thanks

Answer:

Hi Skip,

I'm not totally sure how they would handle that, but I would think that they would have some sort of insurance to protect themselves in an event like this.

Typically if an insurance policy lapses and the car is not totaled, then most any lender will put a policy on the car and demand payment (or tack it on to the loan) for their insurance coverage from the customer.

It sounds as though you may be getting a bill for some if not all of the money that was still owed to Cap One. If not paid, or if no payment arrangement is made, this will more than likely really hurt your credit rating. I would certainly suggest that you contact Cap One ASAP to find out what can be done in this situation and if they did have a policy covering the car.

Hope this helps,

Justin

Go to Insider Car Buying Tips home