Change vehicle ownership within the first two terms

motorists who buy used vehicles must register the vehicles in their names within the first two insurance terms, for insurance companies to settle claims that arise thereafter.

this is applicable to third party insurance policies provided in the road traffic act.

the duration of an insurance term is months, meaning that two terms is months.

according to Finance act number 7 of 2021, which became effective from January 1, 2022, failure to register the vehicle in the new owner’s name during the first eight months after changing ownership of the vehicle, may result in the insurance company declining to settle any claims, which may arise.

the vehicle registration and licencing act [Chapter 13:14], requires new vehicle owners to register change of ownership within 14 days after acquiring the vehicle.

insurance companies are required to operate in terms of the laws of the land as they are expected to follow public policy.

section 46 (1) of the Finance act number 7 of 2021 says; “(1) if the name of the person to whom a certificate of insurance is issued in terms of section 23(2)(b) is not recorded on the registration book of the insured vehicle or trailer as the owner thereof then, despite that fact, such person is deemed to be the owner of the vehicle or trailer for the first two terms of the policy of insurance concerned.

“(2) if after the expiry of the second term of a policy the name of the person to whom a certificate of insurance is issued in terms of section 23(2)(b) is still not recorded on the registration book of the insured vehicle or trailer as the owner thereof, then —

(a) the insurer may refuse to honour the policy of insurance; and

(b) the person in whose name the policy was issued shall be personally liable for the amount for which the insurer would have been liable to pay out under the policy, in addition to any amount that a court may find the person liable for in respect of the death or bodily injury or bodily injury to, any person caused by or arising out of the use of the motor vehicle or trailer concerned on a road.”

What it means is that if the new owner does not change ownership within eight months after acquiring the vehicle, then he/she may not be indemnified.

visit

to see the price of the special excise duty on Change of ownership of second-hand motor vehicles.

meanwhile, motorists are advised that vehicle insurance is not transferable. this means that after buying a vehicle that already has insurance, the new owner should buy his/her own cover as the insurance in the name of the previous owner cannot be used to file a claim that arises after having sold the vehicle.