if you did not have collision or comp there is no point in calling them

 

Get a lawyer.

 

You can certainly swap transmissions with no problem.

 

I've used USAA for many years but I certainly wouldn't expect them cover collision/comprehensive if I hadn't paid for the coverage.

 

My only pause is that you stated USAA is the lien holder and the insurer, even though you switched coverage from one car to another, they knew what coverage you needed for the car they financed. Would that not be negligence on their part because full insurance is required for your Mini? I've had cars that were financed, then switched insurance companies, then notified by the lien holder that they have no record of insurance, had to tell them that I switched companies. My point being: USAA insured both your cars, they held a lien on your Mini, when you switched insurance from your VW to your Mini, they should have been on their game and said, "Mr. Themrethank, you are required to have full coverage on your Mini, you need to update your policy".
I would contact a lawyer.

 

USAA bank and USAA insurance are separate companies under the same corporate umbrella. The bank should have noticed the OP's insurance coverage was insufficient to protect their interests but in the final analysis it's the OP's responsibility to insure he's properly insured.

 

the bank should have forced you into a high-rate insurance in event you didn't provide proof of insurance. I got one of those bills once, like 1000/month.. but if you only had the car a couple of months its something to look into.

What i want to know now is what does the bank do when they find out they are sitting on an unsecured loan.

 

The bank does nothing until you stop paying. You can transfer the engine from your car to any '11-14 S with a blown engine, or any car, if you transfer the tranny as well, but it would be very labor intensive. Not particularly difficult, but you need a garage, a low rise lift, all the tools, and the time, etc. If you wanted your dash, with your electronics, interior, seats, etc, then all the electronics would have to transfer that support the dash etc. Rollers with blown engines are cheap, maybe $4k or less. Even a no name body shop would charge well over $8k to repair all the damage on your car.

 

A finance company's insistence that you carry full insurance isn't for your protection; it's for theirs.

It's to prevent the situation of you still owing money for an asset that no longer exists or is worth considerably less than the lien remaining on it. That puts them in a risky situation because if you decide to walk away from the loan there's no way for them to cover their losses except to sue you, which is expensive and time consuming.

So the fact you didn't have proper insurance is an issue, but not in the direction that helps you. They are now left hoping to heaven that you honor your commitment to pay off the loan, and are definitely not going to pay for any repairs from insurance coverage you never paid for.

And yeah, I'd be relieved that they never figured out that loan is unsecured, because they can call it (demand full repayment of the remaining principal) because you've broken the terms of the financing contract.

 

Exactly. It's the OP's responsibility. When one signs a loan contract it says in that contract that the vehicle needs to be fully covered for the life of the loan. That's on you, not them.