Assignment of the benefit and Assignment of the policy- Insurance Law
Assignment of the benefit:Since the subject matter of the policy alone does not assign any benefit under the policy to the assignee, the next question would be whether or not is possible to assign the benefit itself. By benefit here, we mean the benefits payable under the policy. The benefit can be assigned. It should be noted that the benefit to the policy is a chose in action which though is intangible, could be assigned. However, such assignment should be expressly stated. In this situation the insured is simply saying that the proceeds from any claim he has or may have to go to a third party. It should however be noted that the assignee is only entitled to that which the assignor is entitled to. An example of this is the life insurance.
Assignment of the policy:
What about the policy itself? It should be noted that all policies are regarded as personal to the insured and any assignment of them requires the consent of the insurer. The rationale is that the premiums are based in the computation based on the measure of the risk the insured may expose the insurer to. Therefore, it can be averred that the policy for a policy to be assigned, the insurer’s consent must be sought and if granted, often, such shall amount to the creation of a new contract/policy or a novation of the assigned contract/policy.
See : Peters v. General accident fire and life assurance corp ltd, [1938] 2 all er 267
In this case, the vendor of a motor car insured by the defendants handed over the insurance policy with the car to the purchaser. The policy contained the usual clause extending the cover to any person driving with the consent or permission of the insured. The plaintiff, who had been injured by the car after the sale had been completed, obtained a judgment against the purchaser, and in the present action sought to recover the damages he had been awarded from the present defendants under the provisions of the Road Traffic Act. The court observed that when the vendor sold the car, the insurance policy automatically lapsed and therefore at the time of the accident, the purchaser could not be said to be driving the car by the order or with the permission of the vendor, as the car was then the purchaser’s own property. The insured is not entitled to assign his policy to a third party. An insurance policy is a contract of personal indemnity, and the insurers cannot be compelled to accept responsibility in respect of a third party who may be quite unknown to them.
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