56-7-1106 - Collision insurance purchased as a condition to financing automobile purchase.

56-7-1106. Collision insurance purchased as a condition to financing automobile purchase.

When a creditor or lender requires a borrower to purchase collision insurance as a condition to obtaining a loan to purchase an automobile, and sells collision, but not liability, insurance to the borrower, then the creditor or lender shall provide written notice to the borrower that no liability insurance is being sold. This written notice shall be signed by the borrower and explained to the borrower as a part of or together with the loan papers executed by the borrower.

[Acts 1981, ch. 409, § 1.]