Himachal consumer commission upholds used-car buyer's claim against Oriental Insurance
The Himachal Pradesh State Consumer Disputes Redressal Commission held that a car's insurance passes to its buyer on transfer, and dismissed The Oriental Insurance Company's appeal on 29 October 2026.
Key points
- The Himachal Pradesh State Consumer Disputes Redressal Commission dismissed The Oriental Insurance Company's appeal against a used-car buyer.
- The insurer had rejected the total-loss claim on a car with an insured declared value of Rs 2.2 lakh, saying the policy was never transferred.
- The commission held that under the Motor Vehicles Act a policy is deemed transferred with the car; its order may be appealed.
Photo: Sun Insurance Office (Life time: c. 1912) / Wikimedia Commons, public domain (cropped). Representational image.
The Himachal Pradesh State Consumer Disputes Redressal Commission on 29 October 2026 dismissed an appeal by The Oriental Insurance Company Limited and upheld an order in favour of a car owner whose accident claim the insurer had rejected because the policy was still in the previous owner's name. The commission held that a car's insurance is deemed to pass to the buyer when ownership is transferred.
What Happened
According to the order, the car was insured by its earlier owner for the year from 2 March 2013 to 1 March 2014, with an insured declared value (the value on which a claim is settled) of Rs 2.2 lakh. The complainant bought the car and had the registration transferred to her name on 13 March 2013. The car met with an accident on 17 May 2013 and was a total loss.
The insurer rejected the claim by a letter dated 30 March 2015, saying the policy had not been transferred and the buyer had no insurable interest. The commission noted that the insurer sent this rejection letter to the earlier owner, and not to the complainant.
The District Consumer Disputes Redressal Commission, Shimla, allowed the complaint in part on 16 March 2024. The state commission held that under Section 157(1) of the Motor Vehicles Act, the policy is deemed transferred to the buyer from the date of transfer. The 14-day period in Section 157(2) for the buyer to apply to the insurer carries no penalty and cannot cancel the deemed transfer, it said, and the rule applies to own-damage claims as well as third-party claims. It also noted that no surveyor's report was on record and that the district commission had rightly allowed the claim on the basis of the insured declared value.
What It Means
For anyone buying a used car, the order holds that the existing insurance moves with the car once the registration is in the buyer's name, so an insurer cannot reject an own-damage claim only because the policy was not endorsed in the buyer's name. A policyholder whose claim is wrongly rejected can approach the National Consumer Helpline (1915) or file a complaint through e-Daakhil. The commission's order may be appealed.
Source: Consumer commission order
Sources & Citations
- Consumer commission order — Consumer commission