Auto Insurance Claims: forced place insurance for auto, place insurance, principal balance

Question
I lost my job in September 2011 and as a result I could not afford my comp and collison insurance (full coverage)so it was cancelled...I have kept the monthly payment on the vehicle current without a 30 day late my principal balance is about $5600 and sorry to say that this last saturday morning my vehicle was stolen...and I have no type of insurance on the vehicle whatsoever...can the lender retroactively apply forced place insurance when my policy canceled? what option do I have in dealing with the lender? A police report was filed immediatly after discovering the vehicle being stolen...I live in California.

Answer
Unfortunately I do not think they will apply an insurance policy retroactively.  The whole point of insurance is to provide protection in case of loss.  If you could do so retroactively, no one would pay for coverage until they had a loss.

The lender probably has their own policy to cover their losses in cases like this.  But they will likely still hold you responsible for the balance on the loan.