Do You Need Car Insurance to Get a Title Loan?

There are no legal requirements preventing you from securing a title loan without car insurance. However, to lower their risk, your lender may require proof of insurance before approving you for a title loan.  

At Montana Capital Car Title Loans, Insurance is not required for loans under $5,000. We aim to help individuals who need emergency money and don’t qualify for traditional bank loans. Here’s what you need to know.

Find a Lender Who Doesn’t Require Car Insurance

In order to get a title loan without car insurance, you will need to find a lender who doesn’t require it. Typically, the more money you need to borrow, the harder it will be to find a lender who will approve your title loan without car insurance. 

This is because the larger the loan, the more risk there is for the lender. If your car was damaged in an accident or even totaled, car insurance would help with the repairs or replacing the vehicle. Without insurance, however, the lender is left with less or no collateral to secure the loan. That is why many lenders require insurance on title loans.

Do I Need Car Insurance to Get a Title Loan with Montana Capital?

At Montana Capital Car Title Loans, we don’t require insurance on loan amounts under $5,000. However, if your loan is over $5,000, you will need to provide proof of full coverage insurance. This will provide the funding needed to make any repairs or replace your vehicle should your car be in an accident or stolen and ensure we don’t lose money on the loan. 

We do recommend ALL borrowers purchase full coverage insurance, though. Accidents and theft DO happen, and paying for repairs on top of your title loan payments can be expensive. Thinking ahead and protecting your asset with insurance is a wise investment and will help keep your loan’s collateral safe.

Lenders Protect Their Investment

Two common types of insurance that title lenders often require are collision and comprehensive. These policies help protect the lender’s investment in your vehicle for the duration of the loan to ensure your collateral isn’t lost.

For example, let’s say a borrower defaults on their loan, but their vehicle was totaled in an accident. Without insurance coverage, the lender won’t have anything to repossess and sell to make up for what is owed on the loan.

Your state may mandate specific types of insurance for you to legally drive your vehicle on the road. Liability insurance is a minimum required in almost every state. Policies like comprehensive and collision are often optional. 

However, lenders can decide what insurance requirements, if any, they want to set. If your lender requires “full coverage” car insurance, that means they require you to carry both comprehensive and collision policies to cover any physical damage.

Check out your state’s car insurance requirements and liability vs. full coverage car insurance to learn more.

How Car Insurance Works

Car insurance can protect you in the event of damage or a total loss. Insurance coverage and policies vary but typically include a combination of regular payments (usually semi-annually) and a deductible (the money you pay before your insurance covers any costs).

Some examples where insurance would be beneficial include:

• Your vehicle is stolen
• A tree falls on your car
• Hail shatters and dents your car
• You’re t-boned in an intersection

Determining What Kind of Car Insurance to Get

To protect yourself financially, usually, the more insurance coverage you have, the better. In most states, liability insurance is required to drive your vehicle. This covers anyone or anything you may cause damage to if you are the cause of an accident.

Unlike liability car insurance, collision insurance isn’t required but is just as important. This is because liability insurance covers others, while collision covers your car. So, for example, if you were the reason for an accident and totaled your car, your collision coverage would pay the vehicle’s current value.

Other coverage options include:

• Comprehensive insurance – Collisions aren’t the only thing that can cause damage to your car. If an accident like a falling tree causes damage to your vehicle, comprehensive coverage can protect you from taking a loss.
• Medical payments – If an accident causes injuries to you or your passengers, medical payments cover the cost of doctor or hospital bills.
• Personal injury protection (PIP) – If you are injured while driving, walking, or biking, PIP may cover the medical costs you incur, regardless of who is at fault for the accident.
• Underinsured/uninsured motorist coverage – If someone else causes an accident but doesn’t carry enough or any insurance, your underinsured/uninsured coverage would cover the expense.

Applying with Montana Capital is easy, even if you don’t have insurance.

We offer two ways to complete the application, online or over the phone. Our online application takes only a few minutes to complete, and you’ll receive an answer regarding your pre-approval instantly.

If you need help completing the application, call us at 1-888-700-8900. Representatives can walk you through the process and answer any insurance-related questions you have.

We use the following information to decide if you’re pre-approved. You will need to provide:

• Personal info (name, age, location, etc.)
• Income and employment status
• Car details (make, model, year)
• The amount you wish to borrow

We use this information to decide if you’re pre-approved for the requested loan amount.

Qualifying Factors

While we do pull your credit at Montana Capital, your credit score is not the primary qualifying factor of approval. The most important criteria we consider is your ability to repay the loan and your vehicle’s market value. Our flexible eligibility criteria help borrowers get the financing they need, even if they have bad credit or no insurance.

To qualify for a car title loan, you must meet the following requirements:

• Be at least 18 years of age
• Have a lien-free title in your name
• Provide adequate proof of income
• Provide photos of your vehicle
• Have adequate equity in your vehicle
• Provide government-issued photo ID

Insurance & Title Loan- The Bottom Line

Car insurance is invaluable; it protects you, your car, other drivers on the road, and even your car title loan lender.

Before applying, it is best to check with your lender and state’s laws since regulations vary. If you don’t have insurance, Montana Capital may still approve you if your loan amount is under $5,000. Any more than that, and you will need to shop around for a provider.

Remember, since you’ll pay higher interest rates than traditional financing, it’s best to exhaust all options before deciding on a title loan, no matter how much.Not sure where to start? Apply today to see how much you can get, or talk to a representative at 1-888-700-8900.