West Virginia

The relevant statute is the West Virginia Consumer Credit and Protection Act, W.Va. Code §§46A-1-101 through 46A-8-102 (“WV-CCPA”).

A. Actions creditor may take:

(1) WV-CCPA §46A-3-115(1) - If the contract contains covenants by buyer to perform duties pertaining to insuring the vehicle and pursuant to the contract, creditor pays for performance of such duties on buyer's behalf, then creditor may add the amounts so paid to the debt.

(2) WV-CCPA §46A-3-109a(b) - A creditor may place collateral protection insurance if the following conditions are met:

(i) buyer entered into a credit transaction with creditor;

(ii) the transaction has been reduced to an agreement which requires buyer to maintain insurance on the motor vehicle;

(iii) A notice substantially similar to that below, is in the agreement or on a separate document provided to buyer and any cosignor, guarantor or other person liable on the contract, at the time the agreement is entered. The required notice, which must be on a separate piece of paper, is as follows:

“Unless you provide us with evidence of the insurance coverage required by your agreement with us, we may purchase insurance at your expense to protect our interests in your collateral. This insurance may, but need not, protect your interests. The coverage that we purchase may not pay any claim that you make or any claim that is made against you in connection with the collateral. You may later cancel any insurance purchased by us, but only after providing us with evidence that you have obtained insurance as required by our agreement. If we purchase insurance for the collateral, you will be responsible for the costs of that insurance, including interest and any other charges we may impose in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to your total outstanding balance or obligation. The costs of the insurance may be more than the cost of insurance you may be able to obtain on your own.”

B. Notices required:

(1) WV-CCPA §46A-3-115(1) - Within a reasonable time after the advance, creditor must notify buyer in writing of the amounts advanced, any charges with respect to the advance, any revised payment schedule, and, if the duties pertain to insurance, a brief description of the insurance paid for, including the type and amount of coverage.

(2) WV-CCPA §46A-3-109a(c)(1) - Within 30 calendar days following placement of collateral protection insurance, creditor must mail to buyer and any cosigner, guarantor or other person liable on the contract, at the last known address a notice substantially similar to the following:

“NOTICE OF PLACEMENT OF INSURANCE

Your credit agreement with us requires you to maintain adequate insurance on your collateral until you pay off your loan. You have not given us proof that you have adequate insurance on your collateral. Under the terms of your credit agreement, we have purchased insurance at your expense to protect our interests in your collateral.

The insurance we purchased will pay claims made by us as the creditor. The insurance we purchased may not pay any claims made by you or against you in connection with your collateral.

You are responsible for the costs of this insurance, including any interest and other charges we may impose in connection with the purchase of this insurance. The initial premium payment for this insurance will be (amount), which may or may not include any interest or other charges that we may impose. The costs of this insurance will be added to your payment obligations and may be more than for insurance you can buy on your own.

You still may obtain insurance on your own choosing on the collateral. If you provide us with proof that you have obtained adequate insurance on your collateral, we will cancel the insurance that we purchased and refund or credit any unearned premiums to you.

If, within thirty days after the date this notice was sent to you, you provide us with proof that you had adequate insurance on your collateral as of the date we also purchased insurance and that you continue to have the insurance that you purchased yourself, we will cancel the insurance that we purchased without charging you any costs, interest or other charges in connection with the insurance that we purchased.”

C. Charges permitted:

(1) WV-CCPA §46A-3-115(1) - Creditor must notify buyer in writing and within a reasonable time of any charges with respect to the amount advanced.

(2) WV-CCPA §46A-3-109a(c)(2) - Creditor may charge buyer for the cost of collateral protection insurance, including interest and any other charges imposed by creditor in connection with the placement of the collateral protection insurance. The payment by buyer for such insurance may be by:

(i) Full payment within 30 days after the date of the “Notice of Placement of Insurance.”

(ii) A final balloon payment within 30 days after the last scheduled payment required by the agreement; or

(iii) Full amortization over the term of the transaction, the term of the collateral protection insurance policy, or the term for which amortization is used by the creditor. Note: If a coupon book was used which reflects a form of amortization, creditor must send to buyer a reprinted coupon book with reused calculations of payments taking into account the collateral protection insurance, or, a supplemental coupon book for use by buyer in addition to the original coupon book.

D. Finance charge allowed on creditor's payment: Yes. WV-CCPA §46A-3-115(2) - A sales finance charge may be made for the sums advanced at a rate not exceeding the rate stated to buyer pursuant to the provisions of the federal Consumer Credit Protection Act.

NOTE: Substantial compliance with these provisions is mandatory for the placement of collateral protection insurance in West Virginia pursuant to a credit agreement entered into on or after July 1, 1999. None of these provisions may be held or applied against a creditor in connection with collateral protection insurance placed prior to July 1, 1998. A creditor that places collateral protection insurance pursuant to a credit agreement entered into prior to July 1, 1998 has available to it all of the rights provided under the WV-CCPA if the creditor is in substantial compliance with these provisions other than the notice requirement set forth in A.(2)(iii), above.

Click here to view relevant West Virginia Code and Regulations.