Insurance Claim by Vehicle Financer--Theft During Possession After Surrender by Borrower--No Privity of Contract with Insurer, Claim Not Maintainable
A financer who gets a vehicle surrendered to him by the borrower cannot claim insurance money if the vehicle is stolen while in his possession. A contract of insurance is a personal contract — it exists only between the insured and the insurance company. No third party, not even a financer, can walk in and claim under that contract. Mere surrender of the vehicle does not make the financer the owner of the vehicle. And without ownership, there is no insurable interest. Without a contract with the insurance company, there is no privity — and without privity, there is no liability that can be fastened on the insurer.
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