|
|
|
|
|
|
|
|
|
While buying a second-hand car, get the existing insurance policy transferred in your name within 14 days
Take the case of G. Sridhar, a resident of Andhra Pradesh. He bought a brand-new car, not from the showroom, but from someone, who had purchased it just four days ago. The car ownership was promptly transferred to the new owner, but not the insurance. Since the car was already insured for a year from March 3, 2004, Sridhar probably thought that he had to change the name of the policy holder only at the time of renewal of the policy. Barely six months later, the family went on a pilgrimage. While they were taking a dip in River Krishna, the car got stolen. Sridhar was in for more bad news. The insurance company repudiated his claim on the ground that the insurance policy had not been transferred to his name. In fact, he had not even applied for it within 14 days of transfer of ownership, as required under the law. In response to Sridhar’s complaint, the consumer courts at the district and the state-level held that the insurance company was not justified in denying the claim and directed it to pay Rs 3 lakh along with 9 per cent interest calculated from the date of filing the petition. Their view was that with the transfer of ownership of the vehicle, the insurance policy would be deemed to be automatically transferred in the name of the new owner and the insurer was therefore liable to pay. In response to the insurance company’s revision petition, the apex consumer court looked at the relevant regulations formulated by the Tariff Advisory committee, the Motor Vehicles Act and the judgments of the Supreme Court on the subject. And its conclusion was that the insurance company was justified in not settling the claim. The National Consumer Disputes Redressal Commission pointed out that as per the Tariff Regulations, once the ownership is transferred, the new owner has to apply within 14 days, to the insurance company for a fresh certificate of insurance, incorporating his or her name. Unless this was done, the new owner had no insurable interest. The commission also referred to Section 157 of the Motor Vehicles Act, wherein it said that when a person transfers the ownership of the vehicle, the insurance policy taken for the vehicle shall be deemed to have been transferred in favour of the person to whom the vehicle is transferred. The section also stipulated that within 14 days from the date of transfer, the new owner shall apply to the insurer for making the necessary changes in the certificate of insurance. The commission looked at the interpretation of this provision by the Supreme Court. In the case of Complete Insulation Pvt Ltd Vs New India Assurance Co Ltd, ((1996) 1 SCC 221,) the Apex Court had made it clear that the automatic transfer of insurance stipulated in Section 157 applied only to third-party risks and not to damage caused to the vehicle or the insured himself or theft of the vehicle. In so far as risk other than third-party risk was concerned, there had to be an agreement between the insurer and the transferee, and this was facilitated through an application by the transferee, sent under recorded delivery. In the absence of such an application, the insurer was not liable to pay, the Supreme Court had said in this case. In the end, the National Commission observed that in view of the provisions of the Motor Vehicles Act and the Tariff Regulations and the decisions of the Supreme Court, if the transferee fails to inform the insurance company about the transfer of the Registration Certificate in his name and therefore the policy is not transferred in his name, then the company cannot be directed to pay the claim. This does not, however, apply to third-party damage, the commission held. (M.S United India Insurance Company Vs Goli Sridhar and another, RP NO 2964 of 2007).
|
|||
|
|
|||
Have you just bought a second-hand car or are you planning to buy one? Then remember this golden rule: you don’t have to buy a new insurance policy, but you need to ensure that the existing policy is transferred to your name without any delay. Lack of awareness about this has resulted in many consumers losing out on their vehicle insurance. 