Insurance on Financed Motor Vehicles

Umsted, Deputy Attorney General,

— You have asked to be advised concerning the legality of certain common practices followed in the placing of fire, theft and collision insurance upon financed motor vehicles. In the cases to which you refer us the facts are briefly as follows:

1. A motor vehicle dealer is a fire insurance agent. He sells an automobile on bailment lease and adds to the cost of the vehicle finance charges which include interest on the balance due and cost of fire, theft and collision insurance.1(a) He holds the lease and pockets the agent’s commission on the insurance;(b) He…