Insurance policy transfer delay affects second-hand owner eligibility

Udupi: If the insurance policy is not transferred within 14 days of the vehicle ownership transfer, the second-hand owner is not eligible to seek compensation against the insurance company under service deficiency, ruled Udupi District Consumer Disputes Redressal Commission in an order.

The complainant, a resident of Bhatkal, purchased a car from a person in Bengaluru. After purchasing the car, the original owner transferred the ownership to the second-hand owner at Honnavar RTO office on Nov 30, 2024. Later, on May 29, 2025, the car met with an accident near Kinumulky in Udupi, and was completely damaged. The car showroom provided an estimate that it would cost Rs 10,54,000 to repair the vehicle. At the time of the accident, the said car had insurance worth Rs 7,58,000, and the complainant had submitted the relevant documents to the insurance company to repair the damaged car. However, the insurance company refused to provide the insurance to the complainant.

Subsequently, the complainant filed a grievance against the insurance company under service deficiency before the Consumer Disputes Redressal Commission, seeking compensation.

The insurance company’s advocate H Anand Madiwala argued that at the time of the accident, there was no insurance agreement between the complainant and the insurance company. Further, the complainant has allegedly violated the Section 157(2) of the Motor Vehicles Act 1988 by not transferring the insurance policy within 14 days of the vehicle ownership transfer.

The commission has noted that there was no agreement between the insurance company and the complainant for the vehicle’s own damage claim on the day when the accident took place. Hence, commission president Sunil T Masaraddi and member Sujata B Koralli stated in an order that there has been no deficiency of service on part of the insurance company towards the complainant.