Consumer credit insurance
A consumer credit insurance (KKV) or payment protection insurance protects lenders such as banks, savings banks, automotive banks, mail order companies, department stores, leasing companies, etc. from the effects of losses from installment loans , overdrafts , credit card agreements or electronic cash . The insurer reimburses the resulting damage and takes over the collection and recourse procedure .
In order to fulfill special wishes, but also to buy everyday items, more and more consumers are taking advantage of the numerous and tempting loan offers from various companies. The amount of these loans is around 250 billion euros per year in Germany alone. In the automotive industry, most of the vehicles sold are now financed through leasing or loans from the automotive banks.
In contrast to, for example, lending to companies, private consumers are difficult to check with regard to their credit rating . According to Euler Hermes Kreditversicherungs-AG , around 20 million households in Germany alone are indebted to the amount of a net annual income. Every twelfth household is over-indebted. The introduction of consumer insolvency in the course of the bankruptcy law reform makes many of the outstanding claims unrecoverable. According to estimates of the Federal Association of Debt Collection (BDIU), the number of personal bankruptcies in 2007 to 130,000 rise (2006: 93,242; 2005: 68,898).
- See also: credit insurance , bankruptcy law , consumer bankruptcy