Why does my bank require me to purchase physical damage insurance?

Gary Ashmore
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Probate, Estate Planning, and Family Law Attorney in Dallas, Texas

A bank will require physical damage insurance because they need to ensure they are protected if you get into a car accident. Once you have completely paid for the vehicle and hold the title to it, you can choose not to insure it for physical damage. Typically, you should decide not to purchase this coverage only if replacing it would not cause you financial strain or if you would not plan to replace it.