The amount of insurance coverage you will be required to carry by the financial institute that loaned you the money to purchase the vehicle will vary depending upon the specifics of your loan documents that you signed when financing the car. Each individual lender can determine what insurance and limits they will require the person taking out the loan must carry on the vehicle. Most lien holders though require in the loan or lease paperwork that you carry not only the minimum state required liability or no-fault insurance but also physical damage coverages.

Physical damage coverages include collision and comprehensive coverages. These types of coverages help to protect the asset of the lender, the car, by the car being insured for collisions, no matter who is at fault, and things other then collision such as theft or fire.

If you go through your financing paperwork and are unable to determine the minimum amount of insurance coverage that you must place on the vehicle you are buying then speak to the lender. If you do not place the required insurance on the car then the lien holder may place "forced" insurance on it, which will cost you more than getting your own insurance or perhaps the lien holder will instead decide to repossess the vehicle.

For an insurance quote including collision and comprehensive coverages, click here.