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-   -   Death to 3rd party in accident, but car still not transferred by new owner. Now what? (https://www.team-bhp.com/forum/indian-car-loans-insurance/173571-death-3rd-party-accident-but-car-still-not-transferred-new-owner-now-what.html)

A car was sold about 2 years back and it met with an accident in which the other person on the bike died. Now the car was not transfered but the person who bought the car got it insured. The driver of the car has surrendered to the police. Will the insurance company pay to the third party(the deceased family) or will they reject the claim, as the car is sold but not transfered. Can the onus of paying the compensation come the head of the registered owner. No paperwork is done as of now. How should the original owner proceed in such a case.

I didn't know a place better than this to ask this question. Suggest me please please:

Hope the seller has the papers to show that the car was sold to the buyer, if the papers are there, the seller can prove that he is not liable for any actions.
In this case, the insurance company will deny the claim as the buyer has not transferred the car in his name.

Tell me something... Isn't there a provision in all insurances for a car having a driver? How is this case different from so many others where people who have a chauffeur experience a similar catastrophe?

Yes, that's true.
But in this case why should the seller take the responsibility for the accident for no fault. It is better for the seller to get out of the mess early.

We sold our car last June to an individual seller. I kept a copy of delivery note along with the buyer's license, aadhar and pan card copy. In spite of repeated reminders to the buyer to transfer the car, he hasn't done so. He has stopped picking up my calls as well. So I have sent a copy of all these documents to the RTO as well as the insurance company stating that we have sold the car. I also have kept a reference of the NOC issued by the RTO for registration in a different RTO. This is just for our peace of mind.
You can never be too careful.

I guess he is referring to why the insurance claim be denied just for the reason that the ownership of the vehicle has not been transferred. I am also interested to understand if insurance claim would actually be denied in this case, because as the member rightly quoted, the case is similar when you have a driver for your car or when you lend your car to someone in family or friends. As long as the driver of the vehicle has a valid license and is not drunk etc while driving, i don't think insurance company can deny the claim. Or is it different in this case because the vehicle has been sold? Expert members, some insights please

Is it not possible for the seller to get the signed 'transfer of ownership request' from the buyer on the day of transaction itself, and then submit it to the RTO on the very next day or whenever as early as he wish? Why to give the ball to the buyer? I have even heard cases, where the vehicle was sold to dealer and above letter was obtained with the dealer representative's name as buyer and his signature on it, stating if the dealer does not transfer the ownership to the actual buyer/customer within next 45 days, the seller will submit this letter to the RTO and the ownership will be transferred to the dealer legally.

From below statement it seems like, the insurance has been taken on second owner's name while the vehicle registration still remains with the first owner. So the situation is not same like a chauffeur driven car. And I think there are clauses stating owner's name in insurance and registration certificate must be same. Experts please correct me if I'm wrong.

The only confusion is regarding the third party claim. The civil responsibility is of the original owner is to have the car insured. That is done. The driver wasn't drunk or anything. He has surrendered. But people are suggesting not to submit the sale letter as the third party claim will get denied and the original owner will have to bear the compensation to the family of deceased which can go in lakhs.

Also the Registration and the Insurance both are in the name of original owner. What is being suggested is to make a formal statement stating the registration and insurance and the driver driving the car at the time of accident and not mentioning anything about the sale of the car.

Thats a bit of a grey area here that you will be misrepresenting the ownership of the car.
If the new owner had done his paperwork properly, he would not have been in this predicament. Now because of his mistake, he stands to lose tremendously, and you can help him by withholding facts.

Tough moral decision - Insurance agency which will back out of their obligation due to a technicality vs Buyer who failed to carry out his obligations and has put you in a tough spot.

All you said comes into question when insurance company policy denies the third party claim. Need clarity on this only.

Who holds the current insurance on the car? The original owner or the buyer?


Insurance companies insure cars based on proof of sale (CMV Forms 29/30) even while the ownership transfer is still in progress or not even applied for.

When I sold my car last year, I didn't want the insurance to stay in my name after I handed over the vehicle. I consulted my insurance provider for both possibilities - transferring current insurance to buyer, or canceling mine and letting the buyer get a fresh policy in his own name.

Insurance transfers need proof of ownership transfer (and hence is the slower of the two), while a fresh policy can be issued based on proof of sale.

I canceled my insurance policy and collected my NCB certificate while the buyer got one from the same provider in his own name with CMV Forms 29/30 as proof. I had to sign an undertaking that I've sold the car without insurance and the buyer has bought at least 3rd party coverage the time of purchase. Ownership transfer took about 6 months end-to-end, but the buyer had the car insured in his own name from the date of sale itself.


Long story short: IF the owner has properly documented the sale of the vehicle - all paperwork of sale plus notifying the RTO & Insurance Provider of the sale through Registered Post Acknowledgment Due (proof so neither entity can deny they were notified) - and the current insurance is no longer in his her/name, the original owner should be able to steer clear of legal trouble if it comes to it.


This doesn't add up. Registration still being in original owner's name is understandable, but why was the insurance renewed in the original owner's name? Did the original owner actually consent to this during renewal?

If the policy is not expired, anyone can get the policy renewed online without submitting any documents. Maybe this is how the buyer had renewed the policy.

This... Also the original owner was in the understanding that the car is already transfered, but sadly he was mistaken. There are 2 liabilities in this case. Civil and criminal. The owner is already clear of the Criminal liability as the driver has surrendered and holds a valid driving lisence. But the fact of the matter is that he is still responsible civil liability if insurance company denies the claim. Is there a place where I can read the fine print as I have talked to quite a few lawyers and insurance agents and nobody has a clear understanding.

Thanks! I understand the 'anyone can get it renewed' bit, my query was more on the 'why' not 'how' it was renewed in the original owner's name (hence why I questioned if the original owner consented to it), esp. since it's been two years since the sale. Unfortunate lapse of due diligence on part of the owner.


It's best to talk to the insurance provider. Though generic insurance law may be common across the board, the fine print for coverage may vary from one to another.

If the buyer is known person and seller is willing to help him out, this should work out. Else there is no meaning or necessity for the seller to take this risk if he can prove the car was sold in past.

Also if the seller don't deny now, he is legally responsible for all the mishaps (if any) in past 2 years

It's not the seller who is willing to help the buyer out, it's seller helping himself out. The seller is trapped as if he produces the sale letter may be liable to pay compensation and if he does not mention about the sale letter he is responsible for the incident as well as others which might have happened in the past.

The saving grace is that there is the driver owning up the responsibility and there is the vehicle which is in police procession which can only come out once the registered owner completes the paperwork as per his will.