Insurance companies often come across instances of second-hand car insurance claims, where the new owner files a claim without having transferred the insurance policy in his name. The claim, however, is not admissible in the absence of a valid contract between the insurance company and the new owner of the vehicle.
In a recent case, the Pune Consumer Court ruled in favour of the insurance company and upheld the insurer’s decision to not pay the claim to a second-hand vehicle owner, as he had not transferred the insurance policy to his name. The court ruled that an insurance policy is a contract between a policyholder and an insurer. In the absence of the new vehicle owner’s name on the motor insurance policy, there exists no valid contract between him and the insurance company. Hence, any accidental damage suffered by the new owner is not admissible under the previous policy.