Hi

I had purchased one Alto Car from M/s Rana Motors on 8th Feb 2007 which was on HP from ICICI Bank Ltd. On July 15 2008 the same car was stolen and we had initiated the insurance proceedings. Now the proceedings are complete and the Insurance company (New India Assurance) has told us that the cheque for the claim shall be made out to ICICI Bank as the vehicle was on HP. It is to be noted here that even after the car was stolen we continued to pay the EMIs regularly.

Now, I have a few questions regarding such a case which I put up to the bank personnel and the sales person of M/s Rana Motors from whom we had purchased the car, but they were not able to give me satisfactory answers. I am mentioning the questions below and the answers that have been given to me:

1. Can the existing loan be transferred if we buy another car from the same dealer?

Ans received: No, it cannot be done. the existing loan would have to be foreclosed and a new loan started.

2. OK, what will the bank return to me after getting the payment from the insurance company?

Ans received: As the loan would have to be foreclosed, the pending amount + 5% of foreclosing charged would have to be retained by the bank. If the amount received from the insurance company is less than the foreclosing amount, the consumer has to pay the difference and if it is in excess, the bank will not refund any amount (VERY STRANGE!!!)

3. But why is it like that? What happens to the amount paid by me to the bank?

Ans received: You were driving the car for that duration..

SO I am in a turmoil as what to do, how to go about it, because if you look at it from my point of view, I have lost my automobile also and now going to lose my money too.... If that is the case, what is the point of getting the car insured against theft, I could very well just get it insured just for accident? and if still this was the case, then why did bank continue to take the EMIs from me after I had reported the theft of the car?

Please guide me...

Vaneeta