Company Response
7/19/2024
Company states; We have received a complaint where the member states she was charged $700 worth of fees due to lack
of insurance on her BCU auto loan.
In reviewing the account BCU found that on 1/30/2024 we were notified via the Electronic Data Interchange (EDI) that the member's USAA policy was cancelled effective 2/15/2024. On 3/06/2024, we sent the first email notification informing the member of the need to have an insurance at all times on a financed vehicle, and that otherwise, we would purchase insurance for the collateral, in accordance with the Loan Agreement which the member signed and agreed to at loan opening. Additional email and letter notices were sent on 3/13/2024, 4/02/2024, 4/03/2024 and 4/10/2024.
On 4/10/2024, the member emailed us proof of insurance with Progressive for the period of 4/08/2024 – 10/08/2024. However, this documentation showed that this policy had a $2,000 deductible which exceed our $1,000 maximum and that there was a coverage lapse of 17 days in which the vehicle was not insured. As a result, Collateral Protection Insurance (CPI) was added to the loan account in accordance with the loan agreement signed by the member at loan opening. On 6/03/2024, we received confirmation from State National, our insurance company partner, that the member's insurance company had lowered the deductible to $1,000. Subsequently, on 6/05/2024, a CPI partial refund was made to the loan account, however the coverage lapse remained. On 7/08/2024, the member reached out to State National to provide two separate insurance policies which we were able to validate, and as a result a second partial refund was issued to the loan account on 7/10/2024. Due to still having a one-week lapse in insurance coverage, a small amount of CPI will remain in the loan account. If the member had insurance coverage for that week, we encourage them to provide us with the proof of insurance.
Lastly, since CPI was added to the loan account, three Non-Sufficient Funds fees had been assessed to the member's checking account. As a courtesy to the member, we have reversed all three fees for a total of $87. We hope this brings clarity to the member and appreciate the opportunity to further research this matter which we now consider closed.
Sincerely,
BCU
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