§ 18294 Loan Insurance Cost Collection

• •If you borrow money from a loan company and use your car or house as a guarantee, the company can make you pay for insurance on it.
• •The insurance must be fair—it should cover real risks and last for a reasonable time.
• •The insurance money goes to you or your family if something happens, even if the loan company is also listed on the policy.
• •The insurance must be sold at normal prices by real insurance agents.

You take out a loan using your car as a guarantee.

The loan company can make you buy car insurance to protect the car. If the car gets damaged, the insurance money goes to you, but the loan company is also listed on the policy to protect their interest. The insurance must be at a normal price and cover real risks.