Typically, most lien holder's require that you purchase physical damage coverage. The insurance company will list your lien holder on your insurance policy if you provide this information and they will send a declarations page to them. Your lien holder may have penalties or consequences if you do not comply with their requirement to purchase physical damage coverage which could include taking back your car. You should check with your lien holder to determine their specific requirements and/ or penalties. You have not violated any laws though. You can get a car insurance quote here to see how much it would cost for you to get this coverage. Comment Update: We know of no state laws that require you to list a lien holder or additional insured on an insurance policy. This is typically a requirement of the agreement signed between the lienholder and the borrower. It is not the insurance company's responsibility to run a check to find out if there is a lien on the car, but rather the lien holder's responsibility to verify their property is insured.
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