[gradtamu]

Hello,
I've been trying to figure this out but haven't really found a convincing answer.
I bought an EQB 350 in January this year through a 4-year lease agreement from MBFS. They had given the first year insurance (Reliance General) for free which included comprehensive+Zero Dep+ a bunch off addons I don't need.

Now its renewal time and expectedly, the renewal cost is upwards of 2L.
I did run comparative quotes on policybazaar and Im getting a good deal from ICICI Lombard for OD+Zero Dep+R2I for about 70K.

I read the lease agreement and this is what it says about insurance:

4. INSURANCE
37. The Borrower(s) shall, for so long as any portion of the Borrower(s) Dues is/ areoutstanding/payabletotheLender,fullyinsure,andkeeptheAsset(s)s o insured, at his/ her/ its/ their own costs in the single/ joint names of the Borrower(s), in whose name(s) the Product is registered as per the applicable laws for the time being in force, and assign the benefits of such policy(/ies) with the name of the Lender appropriately endorsed and recorded as ‘Hypothecatee/Loss Payee’ in such insurance policy(/ies). Such insurance required to be taken by the Borrower(s) for the Asset(s) shall be standard comprehensive package policies covering (a) all comprehensive risks, including but not limited to riots, civil commotion, floods and such additional risks/liability to which the Asset(s) is/ are normally exposed, and (b) unlimited third party liability risks. The Borrower(s) shall forthwith upon taking/ renewing any such insurance policies furnish true copies of such insurance policy/(ies) to the Lender to confirm having complied with this obligation.

38. In the event of any failure by the Borrower(s) to obtain or renew insurance policies and/ or to furnish proof of the same to the Lender, the Lender may (but shall not be bound to) insure or renew the Asset(s) at the Borrower(s’) cost. If the Lender pays the insurance premium, or any other monies, for/towards the insurance of the Asset(s), the Borrower(s) shall reimburse all such sums paid by the Lender.

39. The Lender shall be entitled to adjust, settle or compromise at the Borrower’s cost any dispute arising out of or in connection with the insurance policy or any claims arising thereunder and appropriate all monies towards settlement of the Loan and all other outstanding monies due by the Borrower the Lender in connection with the Loan. The Borrower(s) shall not be entitled to raise any allegation against the Lender in case the Lender chooses not to take any action in relation to the insurance claims or proceedings and/ or on the grounds that a larger sum or amount of claims/settlement might or ought to have been received or be entitled to dispute the liability of the Borrower(s) for the balance amount of Borrower(s’) Dues remaining due after such adjustment.

Questions:
1> Am I legally bound by the dealer to only take insurance from them to comply with the agreement?
From what I can read, it simply says that I need to have a comprehensive cover at all times.

2> If I go with an external party, will they replicate the current insurance details regarding the hypothecation mentioned on the current policy?

Please advise.
Thank you.

[Sensible_Speed]

I think Clause 37 is quite straightforward in its language. If the onus is on you to ensure the vehicle is insured and only proof of insurance has to be shared with the lender, you can go ahead and buy the third-party insurance as it works out a lot less expensive than the Mercedes insurance.

[blackwasp]

You can take any insurance, as long as it mentions Lender's name in Hypothecation on the insurance.

[shankar.balan]

I too have a Hyundai Kona EV bought on the company lease program with Orix. From the get go I opted to get my own insurance outside from my regular agent, not even from the dealer. The savings are significant! It will come for renewal in March and I’ll get it done again by my regular agent.
This is perfectly normal and legit.
The rule is simply that the car has to be covered by insurance at all times. Whether leased, bought on loan or through outright purchase. So we as lessee’s are at liberty to choose to get our car insurance done anywhere. There is no hard and fast rule that one has to get it done only by the Leasing company or by the dealer.

[gradtamu]

Originally Posted by Sensible_Speed

I think Clause 37 is quite straightforward in its language. If the onus is on you to ensure the vehicle is insured and only proof of insurance has to be shared with the lender, you can go ahead and buy the third-party insurance as it works out a lot less expensive than the Mercedes insurance.

Thank you Sensible_Speed for your input!

Originally Posted by blackwasp

You can take any insurance, as long as it mentions Lender's name in Hypothecation on the insurance.

Youre right, it is important to check for the hypothecation when porting. Thanks for the tip.

Originally Posted by shankar.balan

I too have a Hyundai Kona EV bought on the company lease program with Orix. From the get go I opted to get my own insurance outside from my regular agent, not even from the dealer. The savings are significant! It will come for renewal in March and I’ll get it done again by my regular agent.
This is perfectly normal and legit.
The rule is simply that the car has to be covered by insurance at all times. Whether leased, bought on loan or through outright purchase. So we as lessee’s are at liberty to choose to get our car insurance done anywhere. There is no hard and fast rule that one has to get it done only by the Leasing company or by the dealer.

That's great to know! I am not even involving an agent. I wet to ICICI Lombard today to get a quote. Next I will go to Bajaj Allianz to get another quote as well. Will pick the best out of all! Thank you for sharing your experience.