In April 2006 the car was stolen. I informed him of this and he said he would file a claim. He then came back to me and said the claim was rejected because I did not have the gear lock on the car, but I did, and how would the insurance company know this in any event? Now I am still paying him R2000 per month. What can I do?

Answer:
I contacted the insurer and they said that they never received a claim from this person. I informed them of your situation and they said that even if they had, the claim would have been rejected.

Here’s why. The seller of the car (lets call him Harry Scott) had an obligation to inform the insurance company that not only had he had sold the car, but that the car had moved to another province/location and moreover, that it was being used for construction/work purposes.

This means that the insurance company was not given the opportunity to assess the new risk. Had Harry simply informed the insurance company that he had sold the vehicle and it was now in Johannesburg, you would have had a legitimate claim.

This means that Harry Scott is guilty of gross negligence, to say the least, and you could pursue a legal claim against him.

Pay your own insurance

This is an unfortunate situation. I know it does not help you now but in future, never give anyone responsibility for paying your insurance, or any contractual obligation for that matter.

Stop paying those instalments too: it is his fault that you are not covered and he must take some of the loss too. Trevor Devitt, the head of communications for Outsurance, says that in general, if you are buying a car from someone, it is better to go through a finance company if possible, because you can register the vehicle in your own name straight away.

If you get the vehicle financed by a private party, get a proper agreement of sale drawn up and witnessed by an independent third party.

Always insure the car under your name. Lease takeovers are a no-go; in other words you take over bank instalments from a third party, because legally the vehicle belongs to the bank until it is paid up. You have no recourse with the owner if things turn sour.

Devitt also says that it is vital to disclose relevant information, i.e. who the regular driver is, where is the vehicle usually parked and for what purpose is the vehicle being used.