Who Pays EMI If Your Car Is Stolen?

Many people in the country aspire to own a car, whether it’s a small hatchback, sedan, or an SUV. Due to the ever-increasing prices of cars, buyers often opt for a car loan to purchase their own four-wheeler. However, have you ever considered what would happen if your car is stolen or damaged before you’ve fully paid off the loan? Would you still be required to make the monthly payments, or could you skip them? If you’re confused, let’s find out who is responsible for making the loan payments if your car is stolen.
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Car Loan Closure – Who Pays EMI If Your Car Is Stolen?

In most parts of Northern India, Toyota Fortuner is a popular car and is often stolen for its high resale value. With pricing of the SUV increasing, most owners would have purchased this SUV on loan making them stressed over loan repayment. So, if you have bought the car by taking a loan and if the car gets stolen before the final settlement or the closure of the loan then you are liable to pay the loan amount back to the bank. As per the banking laws, if your car gets stolen or damaged it’s not the fault of the bank. So, you would need to pay every penny back!

But, what if we tell you that you can skip the full payment or a part of it? Can car loan closure happen? Well, yes! While taking a car we pay for many things including road taxes, insurance and other charges. Having said that, we usually neglect the insurance clauses which might help us during all these trouble-some times. Generally, an insurance policy covers every corner of the vehicle including damages and theft, but it is our part to be assured that our insurance policy has the theft or damage cover until the full and final settlement.

If you have included theft cover under your insurance policy then your insurance company will assist you to pay up to the car’s Insured Declared Value(IDV). IDV is the maximum amount that the Insurance company will pay you in case of theft or damage. A higher IDV means a higher premium, while a lower IDV means a lower premium and could result in less compensation.

In case of a total loss, customers will be entitled for the complete value of the car based on the cover applicable. To any insurance claim under theft or total loss customers will have to file a complaint at the nearest police station as soon as the car is stolen/ involved in an accident. Post this an FIR will be registered and the case will be taken up for hearing. Based on available evidence, the outcome of the case will result in the insurance company having to pay the remaining loan and paying the customer any additional IDV remaining.

During the whole time the case is running, the customer will be required to pay the active loan, although there are provisions to request EMI deferral and stop payment in some cases.

Also Read – New Rs 20 Lakh SUV Is Safer Than Tata Harrier

But What If Your Car Is Damaged!

Well just like the theft cover, insurance companies also cover certain damage. If the damage is done due to owners negligence or by third party negligence it can be covered under the insurance. But what if the car gets faulty parts by the car maker’s end! Recently various cases have risen up where popular brands were pointed out due to their faults, some of the owners filed a case against the OEMs. In such cases, if the OEMs accept the fault then they are liable to pay the amount to the owner, if they don’t accept the same then the owner can take up a case in the consumer court.