Car loan is considered a popular offer of banking institutions. It is offered to people who plan to buy a new car, but do not have the necessary amount of funds for these purposes. Such a loan is offered on different conditions that depend on the bank to which citizens apply. But each lending institution requires borrowers to purchase a comprehensive insurance and life insurance policy. These policies protect against numerous insurance risks, although they have significant cost. Policies are purchased for the entire loan term, but if the loan is repaid ahead of schedule, then each borrower raises the question of how to return car insurance for life insurance. The procedure is considered quite simple, since for this you only need to contact the insurance company with a statement and other documents.
Types of Insurance Policies
When applying for a car loan at Sberbank or another banking institution, each person must evaluate the proposed conditions, since in most cases they differ significantly from one bank to another. Employees of credit organizations take into account the age and income of a citizen. But additionally they require the purchase of insurance policies. The required insurances include:
- Casco insurance. It is property insurance, so banks may require the acquisition of this policy legally. If a citizen refuses to buy, then he will not be able to count on getting the right amount to purchase a car. The size of the fee depends on the cost of the purchased car.
- Life and health insurance. It is imposed by all banking institutions, although it is not mandatory. People quite often complain that they were imposed life insurance with a car loan. It is not required by law, so borrowers can immediately abandon the policy during the cooling period. At the same time, the bank cannot increase the interest rate or change other lending conditions.
When applying for a car loan, you have to sign a large number of documents. At the same time, people simply do not realize that they are signing not only a loan agreement, but even an insurance agreement. If insurance is sold by a bank, then it can only be an additional service of a banking institution, so it is simply impossible to refuse it in a standard way.
Types of Insurance Contracts
Car loan insurance return is possible, but first you need to find out what type of insurance policy was purchased by the borrower. A collective or individual insurance contract may be issued.
A collective agreement is not only drawn up between the buyer of the car and the insurance company, as an additional participant is a banking institution. Under these conditions, a citizen does not receive an insurance policy in his hands, since he compiles only an application for participation in collective insurance. The beneficiary under such a policy is the bank. At the same time, it is simply impossible to refuse such insurance, since it is part of the loan agreement.
Personal insurance involves drawing up a contract between the borrower and a specific insurance company. A person receives a standard auto insurance policy from the company, and often the direct borrower acts as a beneficiary. He will receive compensation from the company upon the occurrence of an insured event specified in the agreement.
Is it possible to return car loan insurance?
The possibility of a refund depends on the rules and features of the insurance contract. If a collective agreement was chosen, then you will have to apply for money to the bank, although in most cases there is no way to return the money. This is due to the fact that insurance is only an additional service of the bank, therefore, it does not have a cooling period.
If an individual contract was drawn up between the borrower and a separate insurance company, then, by law, any person during the cooling period can refuse insurance and return the funds. This can be done immediately after applying for a car loan. But often in the loan agreement provides the opportunity on the part of the bank to increase the interest rate if the borrower refuses to buy a policy.
Return Cases
Before buying an insurance policy, anyone should know whether it is possible to refuse car insurance. Payment for such a policy is considered quite high. In addition, you will have to buy insurance annually until the end of the loan period.
How to return car loan insurance? The procedure can be performed legally in the following situations:
- the owner of the vehicle changes if the bank agrees to sell the collateral;
- the car was stolen or completely destroyed as a result of an accident or other similar situations;
- causing auto damage that made it impossible to continue to use the car for its intended purpose, but the exception is disposal;
- death of the owner, as a result of which the heirs become owners of the property;
- if insurance was issued for the company, then after its liquidation the policy becomes invalid;
- the insurance company is deprived of a license to conduct activities in the relevant field, but at the same time, the car owner must rush so that it is entered in the register of creditors.
Each citizen who owns a car can dispose of it at his discretion if there are no burdens. It is allowed to sell a car even with insurance. In this case, the price of the car increases by the cost of the insurance policy. The insurance company is renewing the contract for the new owner of the car.
How is the money returned?
If a person is sure that he has the right to receive compensation from an insurance company, then you need to figure out how to return car loan insurance. The procedure is considered quite simple and understandable, but it is possible in three cases:
- a person makes a decision immediately after applying for a car loan to refuse insurance, being aware of the negative consequences of acquiring a policy, therefore he contacts the insurance company with a statement during the cooling period;
- unforeseen circumstances arose, as a result of which a person has the right to return his funds, for example, if the car was destroyed;
- A person repaid a car loan ahead of schedule, so he can repay some of the money transferred to the insurance company for insuring his life with a car loan.
In each situation, you need to take different actions.
Refunds during the cooling period
You can return money for life insurance on a car loan during the cooling period, which has been 14 days since 2018. It is possible for a life insurance policy or comprehensive insurance. To do this, the citizen performs the following actions:
- within 14 days after signing the insurance contract, you need to contact the insurance company;
- a statement is made to refuse the services of the company;
- other documents are attached to it, presented by a copy of the citizen’s passport, a previously signed insurance contract and a direct policy;
- Based on this application, the company terminates the contract and returns the previously received funds.
The company, by law, does not have the right to refuse to return a money to a citizen. Therefore, if a person wants to return insurance on a car loan, then specific actions must be performed immediately after receiving a loan. But you should first study the contents of the loan agreement. Often, banks for such actions of the borrower increase the lending rate or terminate the contract ahead of schedule, demanding the return of previously issued funds.
Contingency
The insurance contract is terminated upon the occurrence of insured events, for example, upon the death of a borrower or the destruction of a car. If this situation does occur, then the car owner must perform the following steps:
- an application is drawn up to receive some of the cost of insurance;
- the statement shall indicate the circumstances in which the policy is terminated;
- documents are attached confirming that the car was sold or broken.
Not the whole amount is returned, but only some part, which depends on when the insurance policy expires.
Early repayment of a loan
If a person took out life insurance when receiving a car loan at Sberbank or another bank, then after the early repayment of this loan, he has the right to rely on the return of a part of the previously transferred amount for the policy.
To receive money, the following actions are performed:
- initially you need to pay off fully a car loan;
- a certificate of absence of obligations is taken from the bank;
- an application for recalculation of the insurance policy fee is drawn up;
- a bank statement is attached to it.
Is car loan life insurance compulsory? Such a requirement is not required by law, but almost all banks require their borrowers to purchase such an insurance policy. If a person refuses, then he simply does not receive funds to buy a car. But if the borrower refuses insurance after signing the loan agreement, the bank will not be able to hold him liable.
When do funds arrive?
You can return money for life insurance on a car loan in different situations. To do this, a citizen must independently perform some actions aimed at obtaining funds.
Money is paid out within a maximum of 15 days after the preparation of the application. Directly in the application, the details of the bank account to which the money should be transferred are indicated. But at the same time, only the amount for unused months is paid.
Application Rules
Quite often, banks require their customers to take out life insurance for car loans. How to get money back at early repayment? In this case, you need to correctly compose a statement. It contains the following information:
- personal data of the borrower;
- the requirement to return a certain part of the previously paid funds;
- reason for the refund.
Companies do not have the right to refuse their customers, therefore, they compulsorily recalculate and pay funds.
Conclusion
When applying for a car loan, banks require their borrowers to take out insurance. Casco and life insurance are required. In certain situations, citizens have the right to return some of the money transferred to the insurance company. The entire amount can be returned if you contact the company during the cooling period.
To receive your funds you will have to directly contact the insurance company with a statement and other documents.