‘Stolen SUV’ theft claim rejected over policy transfer, Delhi woman wins Rs 11.65 lakh

Stolen Fortuner, denied claim

The complainant is the owner of a registered Toyota Fortuner. She had purchased the said vehicle from another man, and the car had been insured with the National Insurance Company Ltd. on December 16, 2021, with coverage valid until midnight on December 5, 2022.

She had applied for the transfer of the said vehicle with the transport authority on May 25, 2022, the day of purchase, and it was transferred into the complainant’s name on August 18, 2022. The vehicle was stolen on August 10, 2022, from her parking area, and she immediately lodged an FIR.

After the car was not found, she applied for an insurance claim. Later, she got to know that the insurance company had appointed an investigator, who submitted an investigation report, and based on which her claim was repudiated. On January 31, 2023, the insurance company rejected the claim.

The complainant issued a legal notice on February 25, 2026, to the insurance company, and sought payment of the insurance claim, Rs 2 lakh for alleged deficiency in service, and litigation costs.

National Insurance Company’s contentions

The insurance company claimed that the policy was issued in the name of the previous owner for the period from December 6, 2021 to December 5, 2022. The insured vehicle was sold to the complainant. However, the insurance policy was not transferred to the complainant after the sale of the vehicle.

It contended that on the date of theft, August 10, 2022, the policy was in the name of the previous owner, while the registration certificate was transferred to the complainant. Since the car was not in the possession of the original insured at the time of theft, and there was no transfer of policy, the claim was not maintainable.

The Insurance company submitted that under the Motor Vehicles Act, the transferee must apply to the insurer within 14 days of the transfer, using the prescribed form, to update the certificate of insurance and policy in their name and that there was no contractual relationship between the parties. The complainant in her rejoinder stated the same submissions that she made in her complaint.

‘Award granted’

The commission found the insurance company guilty of deficiency in service by rejecting the complainant’s claim, and directed it to pay Rs 11.65 lakh with seven per cent interest from the date of the car’s theft till payment.

The court also granted the complainant Rs 30,000 as compensation for mental harassment and physical inconveniences, along with Rs 10,000 towards litigation expenses.

Consumer takeaway 

It highlights the precedent where it has observed that upon the transfer of ownership of a vehicle, the associated insurance policy is automatically deemed to be transferred as well. 

For consumer-related grievances, individuals may contact the consumer helpline in their respective states (Delhi: 1800-11-4000) or call the National Consumer Helpline at 1915 for assistance.