24/04/2023
Man Loses vehicle to Auctioneers after an accident, sues Insurer and wins
2014 was probably a good year for Mr. John. (Not actual name). He had secured a loan with a bank for a purchase of a motor vehicle. His joy was however short lived since in March same year, he was involved in a motor accident involved a motorcycle. The motorcycle passenger was injured and instituted a civil suit that neither the insured nor the insurer defended. Judgement was entered in favour of the passenger and Kes 180,000 compensation awarded plus interest.
The motor vehicle was later attached and sold by Auctioneers after the owner had failed to pay the award. The vehicle owner then moved to court seeking compensation from his insurer arguing that the insurance company had failed to settle the claim and that led to the loss of his asset to Auctioneers.
In their defense, the insurer argued that they were never informed of the primary suit and that is why they didn’t act. The insurer also argued that at the time that the vehicle was attached by auctioneers, the insured had sold it to another party and therefore no insurable interest.
During cross examination, it was established that both the insurer and the insured had both been served but for some reason failed to act.
After review of all the facts presented, the court ruled that insurable interest existed at the time of the accident and that since both parties had been served with summons, the insurer ought to have acted and indemnified their client as per the insurance contract. The Insured was awarded 1.2Million, the value of the car as per the policy schedule plus interest.
Lessons Learnt
Always ask for the policy document. This is the contract between you and the insurance company. Majority of the customers settle for the insurance certificate
Once you sell your vehicle contact your insurer and cancel the policy or substitute the old vehicle with a new one.
Always report and fill a claim form after an accident. Capture all the accident details in the form and if possible, seek professional advice on how to fill the claim form. At Fahari Bima, we assist clients on this and other aspects to cushion you after an accident.
If served with demand letters or court summons that you are un aware of, report to your insurer immediately. Ensure that you get a copy with the received stamp form the insurer indicating the date that it was received.
Seek professional advice
