Loan Insurance

Valid as of 01.04.2021

The terms and conditions of the loan insurance (hereinafter the Terms and Conditions) describe the scope of insurance coverage of obligations arising from a consumer loan agreement or hire-purchase agreement, action to be taken in the event of an insured event and the principles of indemnification.
AS LHV Finance (hereinafter policyholder), registry code 12417231, address Tartu mnt 2, 10145 Tallinn, e-mail finance@lhv.ee, has entered into an insurance agreement with the insurer AS LHV Kindlustus (hereinafter LHV) 14973611, address Tartu mnt 2, 10145 Tallinn, e-mail kindlustus@lhv.ee, in which the insured person is a person (hereinafter borrower) who has entered into a hire-purchase contract or a consumer loan agreement with insurance coverage (hereinafter loan agreement).
The terms and conditions are an annex to the borrower's loan agreement and apply to each loan agreement separately.

Definitions

Insured event is an event provided for in the terms and conditions, in the event of which LHV must indemnify loss in the cases and to the extent specified in the terms and conditions.
Insured object is the borrower's financial obligations to the policyholder arising from the loan agreement.
Monthly payment compensation is compensation in an amount corresponding to the amount of the instalment stipulated in the payment schedule of the loan agreement, including repayment of the credit amount, interest, contract fee and paper invoice fee including VAT and monthly fee. The compensation does not include late interest and contractual penalties.
One-time compensation is compensation in an amount corresponding to the total amount of obligations arising from the loan agreement, including the balance of the outstanding credit amount, accrued interest, contract fee, paper invoice fee including VAT and monthly fee. The compensation does not include late interest and contractual penalties.
Employment is the employment of the borrower under an employment contract, a contract of a member of the Management Board or a public service contract.

Validity and waiting period of insurance coverage

  1. Validity of insurance coverage

    1. The insurance coverage starts on the day on which the loan agreement is concluded.
    2. If the loan insurance is added for the respective borrower during the term of the loan agreement, the insurance coverage starts on the day when the loan insurance was added to the loan agreement.
    3. The insurance coverage expires at the end of the loan agreement or earlier on the basis of a corresponding application by the borrower during the validity of the loan agreement, notifying the policyholder thereof.
    4. The policyholder has the right to terminate the insurance coverage earlier by notifying LHV and the borrower two months in advance.
    5. LHV does not pay indemnity for an insured event that occurred before the start of the insurance coverage or after the end of the insurance coverage.

  2. Waiting period
    In the case of job loss insurance coverage, the waiting period is 30 days from the conclusion of the loan agreement, if the loan agreement was entered into together with the loan insurance, or from the addition of loan insurance during the term of the loan agreement. LHV does not pay compensation if the job loss insured event occurred during the waiting period or if the borrower learned of the termination of the employment relationship during the waiting period.

    Insured event

  3. Insured events are the following.

    1. Job loss by the borrower for the following reason:
      1. the employment relationship was terminated for a reason beyond the control of the borrower;
      2. the employment was terminated due to the borrower's state of health;
      3. the borrower terminated the employment relationship after the employer's bankruptcy decision took effect.
    2. Borrower's temporary incapacity for work
      Illness or bodily injury of the borrower due to which the borrower has been temporarily incapable of working for more than 30 days.
    3. Borrower's permanent incapacity for work
      Illness or bodily injury of the borrower, due to which the borrower has been officially declared partially or completely incapable of working. LHV pays compensation regardless of whether the borrower is working or not.
    4. Death of the borrower.

    Exclusions

  4. LHV does not indemnify for damage indirectly or directly caused by the following events, causes or consequences.

    1. Unemployment is not an insured event if:
      1. the borrower's employment ended during the probationary period;
      2. the borrower became aware of the termination of the employment before the commencement of the insurance coverage or during the waiting period;
      3. the borrower's fixed-term employment ended;
      4. the borrower was furloughed or workload was reduced, but the employment was not terminated;
      5. the employment was terminated for a reason other than a job loss insured event, including termination of the employment at the initiative of the employee or by agreement of the parties, as well as due to retirement, non-performance of duties of the employee or failure to perform duties of employment properly;
      6. the borrower was released from public service for any reason other than a job loss insured event, including failure of cooperation, change of citizenship, disciplinary offence, insufficient work skills, or the borrower's own initiative;
      7. an insured event covered by job loss insurance does not include the suspension or termination of the economic activity of a self-employed person (FIE).
    2. Temporary incapacity for work, permanent incapacity for work and death are not insured events if caused by:
      1. an illness, medical condition or injury that began or occurred before the conclusion of the loan agreement, which becomes evident in the first year of the insurance coverage and causes incapacity for work or results in death;
      2. pregnancy or childbirth;
      3. injury intentionally caused by the borrower or intentional self-endangerment, suicide, participating in or abetting the commission of a crime;
      4. cosmetic surgery or tattooing;
      5. use of alcohol, drugs or toxic substances;
      6. HIV or AIDS.
    3. Foreseeable insured event:
      1. the occurrence of the insured event is or was foreseeable at the time at which the loan agreement was concluded;
      2. job loss is considered foreseeable if the borrower knows at the time of concluding the loan agreement that their employment relationship will be terminated during the term of the insurance coverage, including in a case where the borrower has already received a corresponding notice from the employer.
    4. General exclusions
      LHV does not pay indemnity in the event of an insured event caused by the use of nuclear energy for any purpose or where such energy goes out of control or radioactivity, terrorism, war, civil war, invasion, any armed conflict, mass riot, unrest, revolution, coup, strike, confiscation, seizure or lockout.

    General principles of indemnification

  5. In the event of an insured event, LHV indemnifies financial loss incurred due to the borrower being unable due to the insured event to perform the obligations to the policyholder arising from the loan agreement. LHV's general principles for indemnification are the following.

    1. LHV pays the compensation either as a monthly payment compensation or as a one-time compensation.
    2. When determining the indemnity, LHV proceeds from the payment schedule of the loan agreement at the time of the insured event, without taking into account subsequent changes.
    3. The amount of compensation per borrower's loan agreement is limited to an amount equal to the credit amount of one loan agreement or the balance thereof, plus accrued interest, contract fee and paper invoice fee, including VAT and monthly fee. The compensation does not include late interest and contractual penalties.
    4. If several insured events occur at the same time, the amount of indemnity per borrower's loan agreement is limited to the amount of the monthly payment compensation or the one-time compensation.
    5. In the event of an insured event, the insurer shall pay compensation as of the occurrence of the insured event. If the day of payment of instalments arising from the loan agreement payment schedule falls within the period between the occurrence and reporting of the insured event and the decision on indemnity, LHV shall indemnify the instalments until the circumstance underlying the insured event ceases, but not past the expiry of the insurance coverage.
    6. The insured event occurrence date is:
      1. in case of job loss, the day of registration as unemployed with the Estonian Unemployment Insurance Fund;
      2. in the case of temporary and permanent incapacity for work, the starting date indicated on the certificate of incapacity for work;
      3. in the event of death, the date of death.
    7. In the event of insured events related to job loss and temporary incapacity for work, the deductible is 30 days from the registration of the borrower as unemployed or from the start date indicated on the certificate of incapacity for work. LHV does not pay compensation for this time.
    8. In the event of job loss, temporary incapacity for work and permanent incapacity for work, LHV pays a monthly payment compensation.
    9. LHV pays the monthly payment compensation to the borrower. The recipient of the compensation may be the policyholder after a respective application is sent to LHV.
    10. In the event of the borrower's death, LHV pays a one-time compensation, including late interest and contractual penalties.
    11. LHV pays the one-time compensation to the policyholder.
    12. LHV has the right to replace the monthly payment compensation with a one-time compensation.
    13. Payment of the compensation shall be made within two working days after the decision has been made or pursuant to the agreement with the recipient of the compensation.
    14. LHV has the right to refuse to pay the compensation if it becomes apparent that the borrower has intentionally provided false or misleading information to LHV or has failed to provide important information concerning the material circumstances of the insured event.
    15. If LHV delays payment of the compensation, it is obliged to pay late interest at the rate provided in the Law of Obligations Act.

    Action to be taken in case of an insured event

  6. In the event of an insured event, the borrower must:

    1. inform the policyholder of the insured event as soon as possible after its occurrence or upon becoming aware of it at the e-mail address finance@lhv.ee;
    2. follow the instructions given by LHV and the policyholder;
    3. provide LHV with correct and complete information on the circumstances of the insured event;
    4. take into account that LHV may request documents and written and oral explanations from the borrower in order to establish the circumstances of the insured event;
    5. register as unemployed with the Estonian Unemployment Insurance Fund after becoming unemployed and to notify LHV thereof;
    6. notify LHV of the termination of the registration as unemployed, as well as of the termination of the period of incapacity for work or hiring;
    7. prove incapacity for work with a certificate of incapacity for work issued by a doctor.

  7. The borrower is obliged to do everything in its power to prevent the insured event and reduce possible damage and to avoid a possible increase in the insurance risk.

  8. After receiving the notice of loss, LHV must:

    1. alustama viivitamatult kindlustusjuhtumi käsitlemist; start claim adjustment on the insured event immediately;
    2. after receiving a notice of loss, to inform the borrower which documents must be submitted to LHV in order to determine the cause of the insured event;
    3. make a decision on indemnifying loss or refusal to do so within ten working days of receipt of all required documents and determination of the circumstances necessary for making a decision. With good reason, LHV may extend the term for making a decision on indemnification of damage.

  9. All notices necessary for the performance of the Terms and Conditions shall be submitted in a form that can be reproduced in writing.

    Supervision and resolution of complaints

  10. The activities of LHV are supervised by the Financial Supervision Authority located at Sakala 4, 15030 Tallinn. The insured person has the right to file a complaint against LHV with the Financial Supervision Authority (phone 668 0500, e-mail info@fi.ee, website www.fi.ee).The Financial Supervision Authority does not resolve contractual disputes between LHV and the insured person.

  11. All disputes shall be settled by agreement of the parties on the basis of the Terms and Conditions and the legal acts of the Republic of Estonia.

  12. The extrajudicial bodies for resolving disputes are the conciliation body of the Association of Estonian Insurance Companies, Mustamäe tee 46, 10621 Tallinn (phone 667 1800, e-mail lepitus@eksl.ee), and the Consumer Protection and Technical Surveillance Authority, Endla 10a, 10122 Tallinn (phone 667 2000, e- post info@ttja.ee).

  13. If no agreement is reached, the parties have the right to apply to Harju County Court.

    Law applicable to the Terms and Conditions and limitation of claims arising from the terms

  14. The law of the Republic of Estonia applies to the Terms and Conditions.

  15. The limitation period for claims arising from the conditions is three years. The limitation period shall run from the end of the calendar year in which the claim becomes collectible.