When buying a car with a mortgage, the first beneficiary of the insurance is generally specified as a bank or financial company.

Because the title of the loan vehicle is mortgaged to the bank or financial company. If the borrower fails to repay the loan as agreed, the bank or finance company has the right to dispose of the vehicle.

Because the car is a special collateral, accidents of various sizes are inevitable while driving. In order to prevent the following problems, banks or financial companies require the first beneficiary of the insurance to be the bank, for example:

The car was mortgaged to the bank and the loan was 200,000 yuan. As a result, the car was crashed and the residual value may be only 30,000 yuan. The insurance company paid 170,000 yuan. If the first beneficiary is not the bank but the lender, if The lender took away the 170,000 yuan and failed to repay the bank as agreed. The bank finally enforced the mortgaged vehicle and got only a scrapped vehicle with a residual value of only 30,000 yuan. In this way, the bank lost 170,000.

Therefore, the first beneficiary of loan car insurance is a bank or financial company, in order to prevent this kind of phenomenon from happening, and the value of the collateral is not worth the loan amount.

Extended information: Vehicle insurance

Vehicle insurance, that is, motor vehicle insurance, referred to as car insurance, is also called car insurance. It refers to a type of commercial insurance that is liable for personal injury, death or property damage caused by motor vehicles due to natural disasters or accidents.

Car insurance is a type of property insurance. In the field of property insurance, car insurance is a relatively young type of insurance. This is because car insurance was produced and developed along with the emergence and popularity of cars. At the same time, unlike modern motor vehicle insurance, in the early days of car insurance, the main insurance was third-party liability insurance of the car, and gradually expanded to risks such as collision losses of the car body.

Reference: Vehicle Insurance-Baidu Encyclopedia