Few bank customers know that they have the right to refuse loan insurance after receiving a loan. Loan insurance is a voluntary service, but banking institutions often impose it and add it for their own benefit when concluding a client agreement.
You can cancel the loan insurance after receiving the loan only if it was not specified in the terms of the agreement concluded with the bank. Thus, even before obtaining a loan, it is necessary to find out in advance whether it provides for additional insurance premiums that increase the loan amount. Check out the detailed terms of the contract. Even if the necessary information is missing in them, contact the bank employees and inquire about the presence or absence of insurance. The only compulsory insurance is title insurance, which is legally issued when a mortgage loan is issued. Other types of services should be provided only with the consent of the client.
If the availability of insurance was not stipulated in the contract, but later you discovered an increase in the size of the loan or its interest rate, you should contact the bank as soon as possible and request a detailed statement of your credit account. Some banks are fraudulently raising interest rates by including insurance after the loan has been issued. If this happens, fill out an application with a request to terminate the insurance contract and recalculate the loan amount. In case of a positive outcome of the case, the bank will terminate the contract and draw up a new one, according to the client's requirements. Otherwise, the arisen dispute can be resolved in court.
Make a statement of claim to the court, indicating in it that you want to refuse insurance on the loan or completely terminate the loan agreement with an unscrupulous bank. Attach any evidence you have, such as copies of contracts, agreements and other documents that convict the bank of violations. You will also need a written refusal of the institution to terminate the contract or return the funds for the insurance. Dictaphone recordings of conversations with bank employees will be useful. Submit your application to the civil or arbitration court in your place of residence and await a decision on the case.
Today many banks refuse to issue loans without additional insurance. Usually the reason for this is uncertainty about the client's solvency, the presence of "black spots" in the credit history, or simply the desire to get more profit when concluding an agreement. In order not to fall for the bait and not to overpay, ask in advance what is the reason for compulsory insurance. Perhaps the bank will additionally ask you to provide documents confirming your solvency, or it will offer to conclude an agreement on special grounds and without having to buy insurance.
