Foreclosure charges

Querist : Anonymous (Querist) 28 February 2024 This query is : Resolved
I want to know whether a settlement by an insurance company in case of totalled car to the financing institution comes under prepayment category or not and can the institution levy charges for that or not. Thank you for your responses in advance

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T. Kalaiselvan, Advocate (Expert) 28 February 2024
The insurance company will look at the value of your car vs. the cost to repair it. If the cost to repair the car is about the same or more than the value of your car, the insurance company will likely consider it totaled. Some companies might total your car even if the cost to fix it is lower.
Hence, in case of total loss, the maximum payment you get equals to IDV of the vehicle as mentioned in the policy year in which the accident happened.
Since the insurance company has compensated the value of the totaled car, the subject what you want to clarify do not come under this category because of the fact that you have signed a different agreement with the financier hence that condition will prevail.

Isaac Gabriel (Expert) 28 February 2024
Neverthless file a case in consumer commission alleging deficiency of service stating the full facts.

T. Kalaiselvan, Advocate (Expert) 29 February 2024
Consumer commission may not entertain any complaint in this regard because there appears no deficiency in service or unfair trade practice committed by the bank in this regard.
The bank is right in demanding the additional charges as per the terms and conditions of the loan agreement which was accepted and signed by you.

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