A client posed a query to me regarding his claim for insurance.
The client bought a second hand car.
This car, had been insured by the previous owner.
After the car was sold to the client, as a second hand car, the car was involved in a collision.
The client now asks whether he can claim the insurance that was procured by the previous owner.
The answer is No.
Client cannot claim the insurance proceeds out of the insurance procured by the previous owner.
There is a rule in our insurance law that an interest in the property insured must exist when the insurance takes place, and when the loss occurs.
It is true that the client has interest over the second hand car at the time of the loss (collision).
Unfortunately the client did not have interest over the car when the insurance took place.
When the insurance policy for the car was procured, the one who had interest was the previous owner, not the client.
Thus, the client cannot claim the insurance proceeds.
If he makes a claim to the insurance company, the claim will be denied.
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