At the moment of signing a credit agreement a customer must reveal paid insurance policies (property insurance, civil liability of drivers insurance, borrower’s life insurance, etc.).
A creditor bank gives a borrower the right to choose an insurance company from the list of the ones accredited at the bank. Many of the banks have got their own insurance companies (IC), or very close relationships with them, thus, a credit manager of the bank is first of all offering a client their ‘kindred IC’. If the customer wants to be insured at the company which is not in the list of accredited ones, the bank has the right to refuse them in getting a loan.
In a perfect situation, it is right, as the bank giving a credit must have a guarantee of returning its money. Such a guarantee may be received only in case of collaborating with reliable and time-tested ICs. Going through the bank accreditation, the IC reveals the financial state report, list of insurance products, etc., in one word, it proves its reliability to the bank.
But unfortunately not everything is a s perfect as we would like it to be. There take place the following:
- personal interest of the bank management and IC in mutual cooperation;
- personal interest of credit departments managers of the bank and departments of IC;
- personal interest of credit managers and agents of IC.
This all leads to the fact that a customer has to insure at the IC that has been ‘imposed’ by the bank, having no personal contact with IC worker. It happens because a person buying, say, a car dreams of driving it the following day, boasting about it before relatives and friends, and pays signing everything that they were given at the bank, without looking. At appearance of an insured accident, it turns out that the insurance terms are not very convenient to the person, but there is no opportunity to consult an insurance agent as they were insured by a bank’s representative.
The person calls the bank where they are politely explained that all necessary actions concerning arranging a credit were done appropriately – so you have to deal with the IC yourself. If the customer is lucky, IC has good record and treats all its customers normally, keeping all terms of agreement, this person will be a ‘walking’ advertising of this IC; but in case everything turns out in an opposite way, there will appear in our country another person assured that insurance is getting fleeced.
So, how to behave in such a situation? How not to appear face to face with your problems? There is a way out:
- First that is necessary to do is to define which ICs are accredited at the creditor bank;
- Second, you have to ask for your relatives’ and friends’ experience of dealing with insurance companies. It is probable that one of the companies recommended by your friends will be in the list;
- Third, you have to get familiar with all represented terms of insurance companies;
- Fourth, don’t economize! Low insurance tariff of KASKO policy cost in most cases tells about the whole bunch of ‘reefs’ that are pointed out in agreement. And it’s not a secret to anybody that there's no such thing as a free lunch.
- Fifth, which comes from the fourth, you have to study carefully the terms of agreement and insurance rules (if IC is open for the customers, it will show them);
- Sixth, you need to find a good insurance agent or broker who will be a middleperson between you and insurance company.
Conclusion: it is necessary to come very carefully to choosing an insurance company when arranging a credit, and to choosing a creditor bank as well. Believe me, it is worth giving time to. If you are not satisfied with the terms of insurance companies ‘recommended’ by the bank, there is some sense in changing the bank in order not to stay with unpaid credit and without any insurance compensation.
