If you have a loan on your vehicle, you may have noticed that there are certain types of auto insurance policies you are required to have. Many people aren’t sure why they have to provide more coverage simply because they have a loan on a vehicle, but the truth is that this coverage can provide benefits.
So, why do you have to have more coverage if you have a loan? Don Allred Insurance, which helps many drivers in Burlington, NC, can help you understand the insurance policies you benefit from.
Lenders Have Risks
Lenders often require more coverage for vehicles with loans because the lender is taking on more risk. The lender puts up the money, and they have a vested interest in ensuring that they recover either the loan payments or the vehicle in the future. If the vehicle is wrecked, they will not be able to recoup their funds.
If you have a loan on your car, there are a few types of coverage options that may be required. You may be required to carry comprehensive insurance as well as collision coverage to ensure that your vehicle is completely covered in the case of an incident.
Insurance Helps You Too
It is also important that you understand the benefits insurance has for you as well. You may also benefit from gap insurance, which helps you cover that loan even if your car is totaled.
Learn More About Insurance Requirements
Don Allred Insurance understands that you may have questions about car insurance and loan requirements. If you live in Burlington, NC, call our insurance agents to learn more about your insurance options even if you have a loan on your car.