I am repaying the EMI on my car which got stolen a few days ago. As some of the EMIs are still to be paid, who will get the settlement amount from the insurers – the lender or me?
Ali Hasan, Ghaziabad
Since there was a loan on your car, your insurers would have issued the policy with a ‘agreed bank clause’. The implication of this clause is that in the case of any claim under the policy, the claim would be payable to the lender. However, the interest of the lender in the claim amount is limited up to the outstanding balance of the loan amount. Therefore, in your case the insurers will be issuing the cheque of the settlement amount in favour of the lenders only. After receiving the settlement amount, the lender will deduct the outstanding amount of the loan and remit you the balance amount.
