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Does Navy Federal Credit Union require full-coverage auto insurance on all of its car loans?
I'm financing a new car through Navy Federal Credit Union. The loan officer told me I need to have full coverage, which is far more expensive than the liability I had on my old car. Is it normal for lenders to ask for full coverage on an auto loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes, you do typically have to carry full coverage
auto insurance
when you get a car loan
through Navy Federal Credit Union—or most other lenders, in fact. That way, if anything happens to the vehicle while you're still paying it off, the cost to repair or replace it should be covered by insurance. - Liability coverage: Helps cover damages (up to your policy limits) you cause to another vehicle if you're found at fault in a car accident. This coverage is mandatory in most states.
- Collision coverage: Pays for damages to your vehicle if you're in an accident—usually requires a deductible.
- Comprehensive coverage: Covers damages to your vehicle caused by something other than a collision (like vandalism or falling objects)—usually requires a deductible.
Even if you're not financing a vehicle, it's almost always a good idea to include these protections as part of your car insurance policy.
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- Gregory R.
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