Factual Scenario:
“Good day. Hope you are well. I been in an accident on the 19.05.2018. The total damage was R168500 and I had the car insured for the retail value(R125800).
I still need to pay a balance of R6500.
As per my understanding, and had a contract between myself and the Bank(Finance) and took out insurance in case something might happen.
The insurance took the risk by excepting my monthly premium in order to cover my financial obligation towards the Bank.
Questions
1) Who is currently the owner of that car with the outstanding balance of R6500 which I still need to pay?
2) How did this vehicle become the property of the insurance?
3) While I’m still paying, is the Bank still the owner?
4) By paying the bank all the money I own them, do I not become the owner?
5) The insurance did not buy the Car from the Bank, I’ve paid them to cover me in the event something happens.
6) Should I not be the one who decides what happen to the Car?
Answers:
Who is currently the owner of that car with the outstanding balance of R6500 which I still need to pay?
The finance house is the title holder and therefore the property of the finance house.
How did this vehicle become the property of the insurance?
Once the claim is settled and the insured value paid to either the client or the bank, the vehicle becomes the property of the insurer.
While I’m still paying, is the Bank still the owner?
In short, yes, the bank is still the owner. In this scenario, it is likely that the insurer would settle the outstanding finance amount of R6500.00 and the balance paid over to the client. The vehicle then becomes the property of the insurer.
By paying the bank all the money I own them, do I not become the owner?
Yes, by settling outstanding fees, you would normally become the owner on condition that you have received the original registration documents and have completed the change in ownership. However, it depends on what decision you take from there. If the expectation is that the Insurer settles you in full, the vehicle becomes the property of the insurer.
Your insurer may opt to give you a write off disclaimer, in that instance the reasonably expected salvage amount is deducted from the insured value. The client retains the salvage (damaged vehicle) and receives some financial restitution
The insurance did not buy the Car from the Bank. I’ve paid them to cover me in the event something happens.
Again, once the claim is finalised the vehicle becomes the property of the insurer. It is the responsibility of the Insurer to place you back in the same position you were in prior to the incident. If the vehicle is uneconomical to repair then financial compensation is the preferred settlement method.
Should I not be the one who decides what happen to the Car?
Until the vehicle is paid up the insurable interests remains with the finance house.