Can an insurer deny claim against car insurance due to delay in change of owner's name?
In a second-hand car transaction, the seller is supposed to inform the regional transport office (RTO) within 14 days, whereas the car purchaser gets one month to intimate the RTO about the buy. Only then does the RTO record the transfer and change in ownership of the vehicle. In case the RTO delays the process, the buyer's claim against the car insurance cannot be rejected. The Maharashtra State Consumer Commission has ruled that a person buying a vehicle from its original owner in a re-sale deal cannot be deprived of an insurance claim simply because the change of ownership was not effected in the insurance policy
What if the buyer delays informing the RTO?
Then the insurer will honour the claim only if there is third-party loss. Any injury or loss to buyer or present car owner will not be paid