There has been an increase in claim rejections by insurance companies in the sale of second hand vehicles. The biggest reason for this is not to change the insurance policy along with the RC transfer of the vehicle.
SC Judgment on Third Party Claims: The Supreme Court has given a big decision in the case of Third Party Claims. In this, the top court has said that in any circumstance of vehicle transfer, third party claim is necessary. Along with the transfer of ownership of the vehicle, third party insurance is also transferred. In such a situation, the insurance company cannot escape the responsibility of paying compensation to the victims in the event of an accident.
The Supreme Court, while reversing the Allahabad High Court’s decision, said that under the agreement, if someone hires a vehicle from a vehicle owner, control over the vehicle along with third party insurance is also transferred. If there is an accident with this vehicle after this, then the insurance company cannot escape the responsibility of paying compensation to the victims. That is, the company will have to pay a third party claim.
As per the existing rules, if you bought a second hand vehicle and got the vehicle registered in your name but did not change the insurance policy. If there is an accident in the future, then the claim in the on damage component of the insurance cover for the damage caused to the vehicle will neither be available to the new buyer nor to the person in whose name the insurance policy is (to the seller of the vehicle).
Claim rejections increase in second hand sales
In fact, in the second hand vehicle sale, along with the transfer of the ownership of the vehicle as well as the change in the insurance policy, then the own damage claim will not be possible. In the last few years, there has been an increase in the number of claim rejections by insurance companies in the sale of second hand ie pre-owned vehicles. The biggest reason for this is not to change the insurance policy along with the RC transfer of the vehicle.