This type of insurance provides protection for your car, which you have pledged to guarantee the fulfillment of your loan obligations, in case of damage or loss of the car. The amount insured is determined based on the market value of your vehicle or its collateral value specified in the loan agreement. Benefits under this insurance are paid to the pledgee or, at the pledgee’s instruction, to you. This insurance may also cover the bank’s risk of non-repayment of the loan in the period up to the moment when you purchase the car and pledge it.