An important question for any borrower using a title loan in Scottsdale is to ask themselves what happens if you find yourself part of a car accident during the term of the loan contract? After all, if the value of your car drops because of damages, the lender has lost the guarantee of recovering the borrowed money. While the outcome can depend heavily on the conditions issued by the lender, most of these are resolved smoothly with insurance.
If you are lucky enough to be asking this question before you have signed up for a title loan in Scottsdale, now is the time to ensure that your car insurance is active according to the terms of your loan agreement. Things can get pretty ugly when you are forced to repay the loan out of pocket, and without a vehicle to get to work. If you find yourself in a wreck with car insurance, you are looking at a small setback, but nothing worth stressing over too much. If you did not cause the accident, the other car is liable and their insurance will worry about the repairs for your car, or the repayment of the loan if the car is a write off. If your car is totaled in the process, you can expect the loan to be paid based on the value of the car, but again, this will vary depending upon the specific insurers terms. Most title loan places will have you add them to your insurance as a part of the lending process. This ensures they get paid if the car is damaged or even totaled.
If you were the cause of the accident, things may get slightly more complicated. With liability insurance, any vehicles damaged will be covered by your insurance company. However, you will need comprehensive coverage to avoid having to worry about the damages done to your vehicle. It is best to talk with your lender before you borrow to know what type of insurance you have to have according to the terms of the agreement. So, to reiterate, it is a very good idea to postpone any title loan in Scottsdale without first ensuring your car insurance can recover the costs in the case of an accident.