How to get CASCO back if you repay your loan early

Part of the CASCO cost can be returned upon early repayment of the car loan

The Moscow Arbitration Court made a decision in case A40-180758/2014. The court decision obliges insurers to provide policyholders with the right to early terminate an insurance agreement related to a loan agreement. And not just terminate, but also receive a refund of part of the insurance premium, which has not happened before. According to Article 958 of the Civil Code of the Russian Federation, the CASCO insurance contract terminates if the possibility of an insured event no longer occurs. For example, if the car was completely destroyed, and this fact was not an insured event. For most insurers, such an event is a fire due to a faulty vehicle wiring. In this case, the policyholder has the right to expect a refund of part of the insurance premium proportional to the unexpired period of the insurance contract.

If we are talking about early termination of a voluntary car insurance contract at the will of the policyholder, then the insurance premium is returned only if such a condition was specified in the text of the contract when it was concluded. In other cases, the insurance premium is retained by the insurer in full. Selling a car, early repayment of a car loan, dissatisfaction with the tariffs and services of the insurance company - all this is not a reason to terminate the insurance contract. Thus, in such cases, the insurer has the right to evade any payments.

However, judge Blinnikova I.A. motivated its decision, which formally contradicts Article 958 of the Civil Code of the Russian Federation, with the “provision on the fairness of the civil contract” and the “special” status of the credit insurance contract. After all, it was concluded for a specific purpose, not directly related to insurance. The relationship between the loan and insurance contracts is reflected in the insured amount and the insurance premium proportional to the loan. The beneficiary of the credit insurance agreement is the bank, which also indicates the special status of the insurance.

The court found that insurers abuse their rights when drawing up credit insurance contracts. This is expressed in the introduction of restrictions into the insurance contract that are beneficial only to the insurance company. This situation contradicts paragraph 1 of Article 10 of the Civil Code of the Russian Federation. After all, the policyholder’s right to early refusal of a financial service is enshrined in Article 32 of the Law “On the Protection of Consumer Rights”. Article 810 of the Civil Code of the Russian Federation provides for the borrower’s right to repay the loan early. And clause 3 of Article 958 of the Civil Code of the Russian Federation does not limit the insurer’s ability to return part of the insurance premium. Thus, the insurance contract for a car purchased on credit must contain a provision for its early termination upon early repayment of the loan, the court believes.

Calculate CASCO insurance – in 18 companies in 2 minutes

As a rule, when issuing a car loan, banks oblige their clients to insure the vehicle for the full market value, even in the second and subsequent years of the loan agreement. This rule is discriminatory, since in this case the ratio of the insured amount and the amount of debt to the credit institution is not taken into account. Perhaps soon this provision, already in loan agreements, will be appealed. In the meantime, the decision of the Moscow Arbitration Court has at least somehow reduced the injustice of this lending condition.

Let us remind you that there is no case law in the Russian Federation. Therefore, formally, the decision of the Moscow Arbitration Court is not binding on all insurance companies in Russia. In addition, the reason for the litigation was the claim of Rospotrebnadzor to the rules of insurance of borrowers of a specific legal entity - Cardiff Insurance Company. For now, only this organization, based on a court decision, is obliged to change its regulatory documents.

But lawyers believe that the insurance rules of Cardiff Insurance Company comply with Article 958 of the Civil Code of the Russian Federation. The insurer still has the opportunity to appeal the claim of Rospotrebnadzor in the court of the next instance. However, if the case reaches the Supreme Arbitration Court of the Russian Federation and the panel of judges confirms the legality of the decisions of lower authorities, then the court decision will become actually binding for all domestic insurers. The fact is that the decisions of the plenum of the Supreme Arbitration Court of the Russian Federation are a document binding on courts of any level, and are not made dependent on a specific plaintiff or defendant.

Is it possible to get a CASCO refund if the car loan is repaid early?

Often, when applying for a car loan, banks require that the car be insured. And not under compulsory motor liability insurance, but through voluntary insurance. Is it possible to return CASCO if the loan is repaid early and get the rest of the money? And if so, how exactly to do this?

Is it possible to get the money back if the loan is repaid early?

The policyholder can terminate the CASCO contract early at any time, unless it has already terminated for other reasons (for example, the car was completely destroyed).

In this case, the insurance premium is refundable only if this is provided directly by the text of the document. These provisions can be found in Article 958 of the Civil Code of the Russian Federation.

However, when insurance is associated with a car loan, the contract has a special status because:

the purpose of obtaining a policy is not directly related to insurance;
the beneficiary is the bank, not the owner of the car.

Also, when purchasing a CASCO policy for cars purchased on credit, restrictions are often introduced that are beneficial only to the insurer and the bank, which contradicts the first paragraph of Article 10 of the Civil Code of the Russian Federation. In addition, the right to refuse any financial service before its expiration and to repay the loan early is secured by Article 32 of the Law “On the Protection of Consumer Rights” and Article 810 of the Civil Code, respectively.

The bank does not have the right to impose any additional services on a car loan, including insurance. You can refuse to purchase a CASCO policy even at the stage of obtaining a loan, but banks, as a rule, do not inform clients about this.

From all this it follows that the insurance contract for a car that was purchased on credit must have a clause on its termination along with early repayment of the loan. Moreover, with the return to the policyholder of part of his money for unused CASCO time. At least, that’s what the Arbitration Court judges who made decisions on similar cases thought.

In general, practice shows that it is quite possible to return money for voluntary insurance, or at least some part of it. But there are several situations in which terminating the contract early or returning the money will be impossible:

within the framework of the policy, the policyholder received payment for the theft or complete destruction of the car;
the policy was purchased in installments, and the buyer did not make the payment at all or did not make it on time;
when applying for CASCO insurance, the owner of the car provided the insurer with incorrect information;
the paper contains a clause stating the impossibility of early termination or that the funds paid in such a situation will not be returned.

Procedure for terminating the CASCO agreement

Immediately after the car loan is closed, you must submit an application to terminate the contract to the insurer’s office, which it must accept. It is compiled in two copies. One of them remains with the client. It is imperative to require that it be marked with receipt.

As a rule, money is returned either immediately in cash at the cash desk, or within two weeks it is transferred to the client’s account specified in the application. The days already passed will be deducted from the total cost of CASCO, as well as the cost of insurance services for maintaining the policy. The rest must be returned to the client. If this does not happen, you must file a complaint with the Central Bank. This can be done through its official website. If this measure does not solve the problem, you will have to go to court.

Collection of documents

To terminate the contract you will need the following documents:

statement;
CASCO policy;
car owner's passport;
PTS, you can have a copy;
a certificate from the bank stating that the loan has been repaid;
a copy of the loan agreement;
receipt or check for payment of the policy.

Most of the papers must be originals. They do not remain with the insurer - they are simply copied at the organization’s office and returned to the owner.

The application can be written in any form, however, each insurance company has its own rules and samples of such documents. To avoid additional difficulties, it is recommended to follow these rules. In any case, the paper must contain the following information:

to whom and by whom this application is submitted;
the text itself asking to terminate the contract early and return the money for unused time;
details where these funds are transferred;
a list of documents that were attached to the application;
signature and its decoding;
date of application.

You will need to attach your copy of the application (copy) to the complaint to the Central Bank, with the insurer’s note indicating its receipt. When going to court, you will need the same, plus a copy of the Central Bank’s response, if any.

In total, it is quite possible to return some of the money that was spent on CASCO in connection with a car loan. Usually this happens without problems immediately when contacting the insurer. Otherwise, you can try to achieve justice in higher authorities: the Central Bank and the court.

CASCO refund in case of early loan repayment - procedure for registration

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When applying for a car loan, bank employees oblige the client to purchase a voluntary protection form for the entire term of the loan agreement. In this article, we will look at how CASCO is returned when repaying a loan early, how much can be returned, and what to do if the insurance company refuses.

Does the client have the right to return money for CASCO insurance upon early repayment and in what cases

Voluntary insurance is a product from an insurance company that compensates for all costs associated with restoration repairs resulting from damage or theft. When purchasing a car on credit, the client has to purchase a contract for at least a year.

Therefore, when an insured motorist repays the loan ahead of schedule, there is a desire to return part of the unused premium.

The procedure for termination is determined by the insurance organization. To do this, you need to carefully study the insurance rules. As for the law, according to paragraph 3 of Article 958 of the Civil Code of the Russian Federation, in case of early termination at the initiative of the policyholder, the insurance premium is not due for compensation, unless otherwise provided by the contract.

Cases provided for by the rules and agreement:

1. Refund under CASCO policy when selling a car and repaying a loan

A number of insurance companies are ready to return funds under CASCO after the sale of the car if the policyholder fulfills a number of mandatory conditions.

Repay the loan and contact the insurer with the document. This is necessary to change the terms of the agreement, namely the beneficiary, who was the creditor.
After making changes, write a statement addressed to the manager, notifying that the vehicle will be sold in the near future.
After selling the car, write a CASCO return application within 5 days.

Important! Such a large insurance company as Rosgosstrakh asks to notify in advance about the sale and termination. If everything is done according to the rules, you can get a refund. Otherwise, insurers will refuse on legal grounds.

This is the second and final exception to the rule when a financial institution is ready to return funds.

The heir by law must:

contact the insurer's office with a document that the loan has been repaid;
present a will according to which an heir can be identified;
write an application to terminate the contract.

The only negative is that the heir will be able to contact the office of the financial institution only after 6 months. However, compensation will be calculated not from the date of the visit, but from the moment of death of the car owner.

As for the total loss of the car, the insurance company does not make a refund on a legal basis. This is explained by the fact that after payment of compensation in full (within the sum insured), the contract is automatically terminated.

If termination occurs at will, when the loan is repaid, and the client simply wants to withdraw the money, then payment is also not provided. The client will be refused if the contract is drawn up in installments and under CASCO insurance premiums are underpaid.

How much can you return?

If, after studying the rules or consulting with a company specialist, it becomes clear that a refund of the unused portion is provided, you need to find out the amount of the payment. It is important to take into account that the calculation is made by the insurer using a special formula, which is prescribed in the rules or the official website.

To determine a refund under CASCO you should:

Divide the amount of the insurance premium by the total number of days the contract is valid. This is necessary to determine the cost of CASCO for 1 day.
Calculate the number of days remaining until the expiration date.
Multiply the cost of a day of insurance by the remaining number of days of the policy.
From the amount received, subtract the costs of conducting the case (RVD).

Important! It is worth noting that each company sets the costs of conducting a business at its own discretion. According to the company’s internal regulations, as a rule, the size of the RVD is in the range from 30 to 50%.

As for the payment of the unused portion of the insurance premium, financial companies transfer it to the personal account of the policyholder within 20 business days after accepting the full package of documents.

If a company violates payment deadlines, it should file a complaint with the RSA or the Central Bank. When applying, you will need a copy of the termination application, with a note of its acceptance from an authorized insurance employee.

Registration procedure

When contacting the insurer's office, it is important to know how CASCO insurance is returned. All you need to do is follow a few simple steps.

Return procedure:

Preparation of documents. Before contacting the central office of a financial company, be prepared to study the rules and understand whether you have the right to early termination of the insurance agreement or not. Next, you need to prepare a complete package of documents. We’ll look at what exactly you need below in our article.
Visit the office and fill out an application. At the office you will need to fill out an application form indicating:

personal and passport data;
insurance policy number;
reason for termination;
personal account details;
a list of documents that you attach to the application;
date, signature and transcript.

Large insurers fill out the document themselves and give it to their client for review and signature.

3. Receive a copy of the application . At the end of the visit, the client should have a copy of the application in his hands, with a mark of acceptance. The document will be useful if the organization violates the reimbursement deadlines or does not transfer funds at all

Important! You should contact the insurer’s office as soon as possible, since the employee will count the return of unused CASCO insurance from the date of submission of the application.

Documents you will need

To get a refund under CASCO when selling a car, you will need a full package of documents. A complete list is always presented in the rules of voluntary insurance.

The package of documents includes:

personal passport of the policyholder and owner;
original CASCO form;
a certificate from the bank in case of early repayment of the loan agreement;
a document confirming the termination of ownership (if the car is sold);
personal account details where to transfer funds.

Arbitrage practice

Litigation between the bank and the policyholder is a common occurrence that can be found in judicial practice as a result of refusal to return under CASCO. Motorists turn to us when the insurer refuses to pay or violates payment deadlines.

In the second case, everything is simpler, since the client’s rights have been violated and there is an official document according to which the financial company has accepted a full package of documents for termination.

As for the first case, the proceedings are in favor of the insurance company. As mentioned above, if under OSAGO the return conditions are strictly specified, then under CASCO the insurer decides whether to pay money upon termination or not.

At the same time, the client must understand that all costs associated with conducting the case will be paid from his own funds.

Of course, there are exceptions when the court sides with the client. This happens if the client manages to prove that the financial institution violated the terms of the policy. However, in practice this happens extremely rarely.

To summarize, it can be noted that a refund under CASCO when selling a car is possible if this condition is provided for by the rules of the insurer. Of course, the insured can always defend his rights in court, but the practice of conducting such cases suggests that the insurer always wins.

If you have contacted the office of an insurance company in order to terminate a voluntary protection form, we invite you to share your experience and tell the readers of our portal:

Which company did you buy the policy from?
whether the organization agreed to return part of the money because the loan was fully repaid or was refused;
how the termination procedure took place;
how much money was returned?

We will be glad if you liked the article, share the article with your friends on social networks.

Will there be a CASCO refund if the loan is repaid early and what are the nuances in 2020?

Does the client have the right to return money for CASCO insurance upon early repayment and in what cases

Therefore, when an insured motorist repays the loan ahead of schedule, there is a desire to return part of the unused premium.

The procedure for termination is determined by the insurance organization. To do this, you need to carefully study the insurance rules. As for the law, according to paragraph 3 of Article 958, in case of early termination at the initiative of the policyholder, the insurance premium is not due for compensation, unless otherwise provided by the contract.

Cases provided for by the rules and agreement:

Refund under CASCO policy when selling a car and repaying a loan

A number of insurance companies are ready to return funds under CASCO after the sale of the car if the policyholder fulfills a number of mandatory conditions.

Necessary:

Repay the loan and contact the insurer with the document. This is necessary to change the terms of the agreement, namely the beneficiary, who was the creditor.
After making changes, write a statement addressed to the manager, notifying that the vehicle will be sold in the near future.
After selling the car, write a CASCO return application within 5 days.

This is the second and final exception to the rule when a financial institution is ready to return funds. The heir by law must:

contact the insurer's office with a document that the loan has been repaid;
present a will according to which an heir can be identified;
write an application to terminate the contract.

How much can you return?

To determine a refund under CASCO you should:

Divide the amount of the insurance premium by the total number of days the contract is valid. This is necessary to determine the cost of CASCO for 1 day.
Calculate the number of days remaining until the expiration date.
Multiply the cost of a day of insurance by the remaining number of days of the policy.
From the amount received, subtract the costs of conducting the case (RVD).

If a company violates payment deadlines, it should file a complaint with the RSA or the Central Bank. When you apply, you will need a copy of the termination application, with a note of acceptance from an authorized insurance officer.

Registration procedure

When contacting the insurer's office, it is important to know how CASCO insurance is returned. All you need to do is follow a few simple steps.

Return procedure:

Preparation of documents. Before contacting the central office of a financial company, be prepared to study the rules and understand whether you have the right to early termination of the insurance agreement or not. Next, you need to prepare a complete package of documents. We’ll look at what exactly you need below in our article.
Visit the office and fill out an application. At the office you will need to fill out an application form indicating:

personal and passport data;
insurance policy number;
reason for termination;
personal account details;
a list of documents that you attach to the application;
date, signature and transcript.

Large insurers fill out the document themselves and give it to their client for review and signature.

3. Receiving a copy of the application . At the end of the visit, the client should have a copy of the application in his hands, with a mark of acceptance. The document will be useful if the organization violates the reimbursement deadlines or does not transfer funds at all

Important! You should contact the insurer’s office as soon as possible, since the employee will count the return of unused CASCO insurance from the date of submission of the application.

Documents you will need

To get a refund under CASCO when selling a car, you will need a full package of documents. A complete list is always presented in the rules of voluntary insurance.

The package of documents includes:

personal passport of the policyholder and owner;
original CASCO form;
a certificate from the bank in case of early repayment of the loan agreement;
a document confirming the termination of ownership (if the car is sold);
personal account details where to transfer funds.

Arbitrage practice

At the same time, the client must understand that all expenses associated with conducting the case will be paid from his own funds.

If you have contacted the office of an insurance company in order to terminate a voluntary protection form, we invite you to share your experience and tell the readers of our portal:

Which company did you buy the policy from?
whether the organization agreed to return part of the money because the loan was fully repaid or was refused;
how the termination procedure took place;
how much money was returned?

Additionally, we offer all clients to get advice on any issue in the insurance industry from our expert. We will definitely help.

We will be glad if, after reading the article, you like and share the article with your friends on social networks.

Read more about how to terminate a compulsory motor liability insurance agreement.

How to return comprehensive insurance if you repay a loan early

CASCO is a type of commercial car insurance. It is not mandatory, but often accompanies a loan taken from a bank to buy a car. Despite all its advantages, this type of insurance has a significant disadvantage - significant cost. This fact complicates life for borrowers - not only do you have to repay the loan, you also have to pay insurance! Dear drivers, we have good news for you - CASCO can be returned if the loan is repaid early.

Information about car insurance policies

The most well-known insurance policies are OSAGO, DSAGO and Casco.

OSAGO is a type of insurance that is mandatory for all car owners. The birthplace of compulsory motor liability insurance is the United States of America, where this type of insurance originated. The original intent of insurance was to provide mandatory compensation for damage to persons injured as a result of the actions of the car owner who was involved in an accident. This made it possible to minimize the financial risks of the vehicle owner - there was no need to pay compensation to the victims from his own pocket. Later, the idea of insurance extended to the owner of the car - he was also entitled to a payment.
DSAGO is the same as OSAGO, but with an increased insurance limit - up to 3 million rubles.
CASCO is insurance with a large list of damage risks. From this list you can select those risks that suit the car owner best. For example, you can insure against scratches on the car body or against the loss of car devices (radio, windshield wipers, mirrors). The word CASCO is not an abbreviation, it comes from the Spanish word “casco” - helmet. In a figurative sense it means protection.

Car insurance - the opinion of Russians and the policies of banks

The situation when the heart aches from the amount of money spent and the realization that this money will have to be returned is familiar to many. There is no need to think that this state of affairs is unique. VTsIOM studied the opinion of Russians towards car insurance - 65% of respondents have a positive attitude towards insuring their car, and 26% are sharply negative. The likely reason for this attitude is the lack of transparency in the issuance of an insurance policy. It is difficult for us to judge the actual state of affairs in the insurance business, but this is the opinion of Russians.

The same survey showed a positive attitude of Russian car owners towards MTPL. Most Russians have come to terms with the fact of compulsory insurance and even find it useful. At the same time, the critical perception of drivers does not disappear anywhere; many of them believe that insurance will not be able to help them as much as it should. The attitude towards CASCO is even more negative - drivers consider it completely unnecessary. What is really needed is a bank loan. In order to receive it, the borrower may agree to undesirable conditions, for example, taking out a CASCO policy.

It is beneficial for banks to deal with insurance companies (ICs) - their conditions for issuing policies are more flexible than those of the state. The insurance company takes into account the interests of the bank and indicates them in the agreement. Therefore, many banks have a policy of imposing additional car insurance when taking out a loan. You need to remember that additional car insurance is not mandatory - you can refuse it. The possibility of refusal is also present in relation to other insurance services traditionally offered by banks.

Psychological preparation before going to the bank is very important. You need to understand that the bank is interested in issuing loans - this is their bread. There is no need to think that refusal of additional services will result in a refusal to issue a loan. Even if this happens, which is unlikely, you need to remember that in Russia there is not one or even 10 banks, but much more. All banks give loans, and you will definitely be lucky with one of them; you need to confidently move towards your goal.

Important! Banks do not provide information about the possibility of refusing additional car insurance. Before going to the bank for a loan, it’s a good idea to take care of obtaining the necessary knowledge that will help you avoid unnecessary financial troubles in the future.

Refund of money for insurance upon early repayment of the loan

The most reasonable thing a bank client can do is not to agree to any additional conditions when receiving a loan. Every citizen of the Russian Federation has the right to disagree. If this happens, there are ways to return the money paid for insurance. We will learn how to return the money from the information provided below.

Procedure for refunding money for insurance

In our country, the imposition of services for the purpose of obtaining benefits is prohibited by law. But financial lending institutions periodically circumvent these restrictions, citing the fact that the bank does not receive benefits. In practice, there are situations when the loan manager has incentives for the number of insurances sold.

There is Resolution No. 3854 of the Central Bank of Russia dated November 20, 2015, which stipulates the minimum requirements for the implementation of any type of voluntary insurance. One of them is the obligation to return money to the borrower by the insurer for the car loan policy. The policyholder has the opportunity to refuse voluntary insurance within five working days from the date of signing the contract. The insurance company must return the money for insurance within ten business days from the date of filing the application.

If the right to return money for insurance is stipulated in the loan agreement, this greatly simplifies the matter. In most cases, when the question of returning money for insurance arises, banks and insurance companies do not create obstacles and allow the client to exercise his right. But awareness of being right, understanding the background of what is happening should not be a reason for the client to behave in a conflict.

It is unlikely that the insurance company and the bank will put serious pressure on the client in order to maintain insurance obligations by the policyholder. For such cases, a legal procedure is provided for filing a claim against the insurer and/or its intermediaries.

The claim must be made in writing. It is advisable that the text of the claim be drawn up by a specialist, a lawyer who has skills in drawing up such documents. The claim must be drawn up in two copies. One of them should be personally brought to the bank and received from the manager a note that he has received the document. The claim can be sent by registered mail with notification.

If the recipient does not respond to the mail, you can go to court and/or Rospotrebnadzor. To do this, you need to fill out an application. Copies of the following must be attached to it: a loan agreement, a claim, an insurance policy, a receipt for payment of the policy. You can add a copy of the bank’s response to the claim to the listed copies of documents. If it is not there, you need to inform the court about it.

The loan was repaid early, the money needs to be returned

So, the loan is repaid ahead of schedule, but the insurance policy continues to operate, regularly extracting money from its owner. The norm of the Civil Code of the Russian Federation, prescribed in Article 958, obliges the insurance company to return the money to the policyholder for insurance on a car loan. To get your funds back, the policyholder must submit an application to the insurance company as soon as he pays off the last part of the loan. The application must be accompanied by copies of:

passport of the policy owner;
loan agreement;
a certificate from the bank confirming that there are no debts on the loan.

The application must write about early termination of the contract and the return of the remaining funds. If everything goes as it should, the insurance company employee will return the money, minus the amount that was due under the loan agreement.

Important! If the contract contained a clause about non-repayment of funds in case of early repayment of the loan, then neither the court nor Rospotrebnadzor will help here. You will have to come to terms with the question “How to get the money back?” loses its meaning.