Kathmandu. A new fact has come to light that the insured has suffered a huge financial loss due to the non-transfer of the insurance policy even though the Blue Book vehicle registration book is registered in their name.
KATHMANDU: Nepal Insurance Authority (NIA) has dismissed a claim related to Himalayan Everest Insurance (IC) citing lack of insurable interest. This decision has taught a lesson that along with the blue book, the insurance should be transferred immediately while buying and selling vehicles.
Shiva Bahadur Danuwar of Sunsari purchased a motorcycle (Ba-02-035-Pa 6519) from Rishika Paints, Hansraj Hulas and Co Pvt Ltd. He got the Blue Book transferred to his name from the Transport Office on April 29, 2021. However, he forgot to transfer the insurance of the motorcycle to the policy of Himalayan Everest Insurance, which is in the name of Rishika Paints.
The term of the policy was valid till March 28, 2022. Ironically, the motorcycle was stolen on December 1, 2022. Shiva Bahadur filed a petition with the company for a claim, but the company refused to pay the company, saying that the insurance policy was not enrolled.
Basis of Judgment and Decision
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The Nepal Insurance Authority (NIA) has taken the Motor Insurance Rates Directive, 2073 BS as the main basis in this case. According to Point 13 of Chapter 6 of the guideline, if the new owner does not transfer the insurance policy in his name or do not get a new insurance within 35 days of the change of ownership of the vehicle, the old insurance policy becomes inoperative.
The blue book in the name of Shiva Bahadur was released on April 29, 2021, but the theft took place on December 19, 2022. It has been almost 8 months since the transfer of the ownership of the property, but it has not been seen that he has transferred the insurance.
The authority dismissed the claim complaint on October 8, 2081 stating that the insurance was a contract and the insurance company had not extended the deadline for 35 days.
At the core of this judgment is the principle of insurable interest. The insured must have such a legal and financial relationship with the insured item (vehicle, house or property). The safe existence of which benefits the insured and its destruction or loss causes direct financial injury to the insured.
Let’s understand this with an example
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Insurable Interest: Basis of ownership If you have insured your car, you have an insurable interest in it. Because if the car is stolen, you will suffer a financial loss. However, you cannot claim the neighbor’s car by insuring it. Because when a neighbor’s car is stolen, you do not suffer financial loss.
Reference to Namsari: In the case of Shiva Bahadur, he bought a motorcycle and financial relationship was established, but he was not registered as an insured in the contract policy with the insurance company. The old policy was in the name of Rishi Paints. After 35 days, Rishika Paints lost its ownership interest in the motorcycle. However, the insurance was not legally transferred in the name of Shiva Bahadur. As a result, no one has the right to claim insurance legally when theft occurs.
Important Tips for Insurers{
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If you are buying a second-hand vehicle, go to the insurance company on the same day as the bluebook is renamed. Don’t be sure that you have a 35-day expiration period, since you are not compensated for any accidents or thefts that occur after your policy has expired.
It does not mean that the insurance company is charging a premium or if the policy is overdue. Legally, it is mandatory to match the name of the insured and the name of the bluebook.
