Members with collateral loans are required to maintain insurance coverage that protects North Alabama Educators Credit Union from financial loss as a result of damage or destruction of the property securing the loan. Comprehensive and collision coverage is required. The policy must also contain a loss payable clause endorsement naming North Alabama Educators Credit Union as lienholder of the collateral.
Proof of proper insurance coverage needs to be forwarded to the credit union for new loans or changes in your insurance company. Proof of insurance be received within 14 days of a new loan or a policy termination notice. If we do not receive proof of insurance in the time frame allowed, a policy protecting the credit union will be ordered with the cost of that premium being added to the outstanding loan balance. The loan payment amount would also be increased to maintain the original amortization schedule of the loan.
Forced placed collateral protection coverage is NOT traditional insurance. It provides no coverage for other vehicles involved in an accident. It does not provide coverage for the full value of a vehicle. It only provides coverage for the outstanding balance of the loan. If your loan balance was $5,000 and your $14,000 valued vehicle was totalled, only $5,000 would be paid on a claim. Forced placed collateral protection coverage is expensive because it is forced placed.
We do not want to have to add forced placed collateral protection but we must have the collateral loans protected. Members should be able to obtain traditional insurance coverage for far less cost. There are "high risk" insurance agents that can provide traditional insurance in most cases.
If you receive a notice from the credit union requesting proof of insurance, please take it seriously and provide the proof of insurance. Members can call the insurance tracking center directly at 1-866-260-6097 or update their insurance status at www.myloaninsurance.com . Proof of insurance can also be faxed directly to 1-817-276-7860.