What Insurance Do I Need for a Title Loan?

Auto insurance can help protect the value of your vehicle and your title loan borrowing power. At Georgia Title Loans, we offer loans up to $50,000 for individuals with various financial needs. Here is more information about the type of insurance you may need before you get a secured loan using your vehicle’s title: 

What Are Title Loans?

A title loan is a short-term, high-interest loan where the borrower uses the vehicle’s title as collateral. If the borrower is unable to repay the loan, the lender has the right to take possession of the vehicle. These loans are a quick and easy way to access cash. This makes them a good solution for individuals facing financial emergencies or other unexpected expenses. Some loan providers may require proof of insurance to protect the borrower and the lender. 

Why Is Insurance Needed?

When you use your vehicle as collateral, the lender may ask for assurance that their investment is protected in case of unforeseen events. Some events that may occur include accidents, theft, or natural disasters. Insurance coverage reduces the financial impact of a stolen or damaged vehicle for the borrower and lender. Proper coverage also protects the value of your loan collateral.

Types of Insurance to Purchase

Some of the insurance policies that are beneficial to have before using your vehicle to secure a loan include comprehensive auto, collision, and liability insurance. Comprehensive coverage protects your vehicle from non-collision incidents. These might include theft, vandalism, and natural disasters. Some lenders often require borrowers to have comprehensive auto insurance to confirm that the vehicle’s value is protected throughout the loan period.

Collision coverage is designed to cover your vehicle’s repair or replacement costs in case of an accident. Our lenders may ask that you have collision insurance before applying for a loan. This safeguards their interest in the collateral. Liability coverage protects you if you are responsible for an accident that results in injury or property damage. While lenders may not always require this type of insurance, purchasing liability coverage protects you from potential legal consequences and further expenses.

Opting out of Insurance

Opting out of insurance coverage before obtaining a loan can have financial consequences. You may still be responsible for repaying the loan if your vehicle is damaged or stolen without insurance coverage. Your ability to work and meet daily commitments could also be compromised without transportation. The costs of repairing or replacing the vehicle, combined with the financial strain of the loan, can lead to a challenging situation for the borrower. At Georgia Title Loans, we create loan offers for applicants with valid, current auto insurance. We don’t require applicants to have extra liability coverage. 

Work With Georgia Title Loans

Our team of loan officers will determine the amount you are qualified to borrow based on your vehicle’s quality and your financial needs. We have a minimum loan amount of $200 and a maximum amount of $50,000. Before you apply for a loan through Georgia Title Loans, make sure your vehicle’s insurance is up-to-date. Contact us today to learn more about our loan types and what insurance is required.