Am I protected if my ex doesn't maintain insurance on the leased vehicle for which I am liable?

Question

This question probably requires an insurance professional to answer. I signed a lease on a vehicle and my ex was granted "custody" of the car in the divorce. She is required to make the payments under the lease. If she doesn't make the insurance payments and the policy lapses and then she has an accident is the insurance company going to refuse to pay? Or is there some rider on a standard policy which says the lender will pay to keep the policy in effect while they begin action to repossess and sell the vehicle?

Answer 1

Yes, you are liable. If you are that concerned that your ex won't insure it, insure it yourself. It could save you a lot of money in the end.

Answer 2

Approach this from the point of view of the lessor.    Who owes for the car.  The ansewer is YOU, so if the car is damaged, ultimately YOU will be held accountable regardless of what the court obligated your ex to do.  At that point YOU wiould have an action against her (back to court for both of you).

You should ask that you be named as an additional insured on the policy so that you are advised if she cancels the policy or if it lapses.  That will allow you to take out liability coverage while you deal with your ex.

BUT.. why not just contact the lessor and have them transfer the lease directly to her .. might cost you a processing fee, but you would sleep better at night.

.???

Answer 3

No.  You are the one responsible for the car - it is your credit, and your license on the line.  If say, she hits and runs someone, the plate will be traced to you. The court order does not take away your end of the contract that you signed when you leased the car.  Also, if the insurance lapses, the lender can force-place insurance - unfortunately, they normally only cover the car, to cover the loan - and don't cover any liability for accidents.  If you suspect the insurance is not being paid, I suggest you call the lender to see where they are with the repossession.  If they are not close, I suggest you pay the insurance.

Answer 4

If you know for sure that the insurance is not being paid, call the lease company and let them know. You signed the lease agreement so you are responsible in the end. I have learned that divorce orders do not always cover you in debt cases, even when the debt was court ordered to the other party.