Auto Insurance Claims: hit and run on a financed vehicle, leinholder, collision insurance

Question
Hi - My financed Hyundai was totaled in a hit and run. When I called Geico, they said I didn't have collision insurance, and that i'd have to eat the loan. As far as I know, it's illegal for a financed car to not have collision! A plate number was obtained by a witness for the assailant's car.(And put in a police report) What are my options? Do I have to eat the loan? Is Hyundai or Geico at all responsible? Should I get a lawyer? Help!

Answer
Hi Alexandra,

First you need to demand that Geico provide you a copy of your original insurance application to see what coverages were on that application. Very often as time goes by and policies get renewed, there is a computer error that drops the coverage. You also what to find out if your finance company is listed on your policy as a leinholder. All finance companies require that they be listed on your policy as a leinholder and that they be notified if you ever drop your insurance. Then if they are notified that your insurance has dropped, the leinholder would send you a letter telling you to either provide them with proof of new insurance or they will buy insurance for you and add it to your loan. So iv you verify that no coverage was ever purchased or that is was subsequently dropped from your policy, you should call your finance company to see if they were ever notified of the dropped coverage and if they purchased coverage for you. If they did purchase coverage you should know that it will only cover the finance company upto the balance of your loan. If the car is worth more than the loan balance, you will lose the difference.

I hope this helps
Richard Hixenbaugh

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