Page 19 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

owner to insure his financial interest over the vehicle
against such loss or damage.

2. Financier's Insurable Interest - If a vehicle is
purchased under a hire purchase agreement, the
Finance Company has an insurable interest in the
vehicle until all the installments are repaid. This
entitles the Finance Company to ensure and insure
his financial interest over the vehicle against such
loss or damage.

.
3. Garage Owners' Insurable Interest- Under
common law garage owner acts as a bailee, when
the vehicle was under his custody for repair.

During that time he required to take reasonable care
of the vehicle against loss or damage and its failure
will made him liable to the owner of the vehicle. So
the garage owner have insurable interest over the
vehicle so long the same is under his custody.

Third Party Liability
Owner's insurable interest under M.V. Act -Under
section 146 Motor Vehicles Act, 1988 no person shall
use or allow any other person to use a vehicle in a public
place unless the vehicle is covered by an insurance policy
complying with the requirements of the Act. Thus a third

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