Is it legal for finance loan companies to make you purchase extra insurance, such as life, disability, etc.?
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Is it legal for finance loan companies to make you purchase extra insurance, such as life, disability, etc.?
Asked on March 4, 2015 under Business Law, Kentucky
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Yes, it is perfectly legal. They are not "making" you purchase the additional insurance--they are telling you that IF you want loan from them, you have to comply with certain conditions or requirements; and conversely, if you are unwilling to comply with their conditions, you can avoid doing so simply by not borrowing from them. No one forces you to borrow; and no one forces them to lend. They can put any conditions they like on lending, and you can choose whether to do business with them or not.
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