How to transfer car insurance policy?
Buying a car is exciting, even if it is a pre-owned car. However, the process of transferring a car insurance policy can become tedious, if not done properly. Here, we look at how to transfer a car insurance policy and why it is crucial. If you plan to buy a second-hand car, you should learn how to go about transferring a car insurance policy.
What is car insurance policy?
In India, having a car insurance policy is mandatory as per the Motor Vehicles Act, 1988. The insurance policy is a contract between the car owner and the insurance company, and offers protection to the car owner against financial loss due to accidents or theft.Why is transferring car insurance policy important?
Transferring a car insurance policy is crucial. It ensures that the entire documentation process with regard to the sale of the vehicle is authenticated. When you purchase a pre-owned car, it becomes imperative for both the seller and the buyer of the vehicle to transfer the car insurance policy. This is because you become a party in the policy contract only after the policy transfer is completed. Until the car insurance policy is transferred, you are not eligible to file for a claim in case of damage incurred to the vehicle.
Why is it crucial for the seller of the car?
A car seller must legally transfer the car insurance policy to the buyer of the vehicle within 14 days of the sale. Failure to do so can result in - - The previous owner incurring the cost for any damage incurred by the car.
- Losing out on the No claim bonus (NCB)
Why is it important for the buyer to transfer the car insurance policy?
As the car buyer, if you do not ensure the transfer of the insurance policy, you are not the car’s legal owner. You need to ensure policy transfer within 14 days, or else it could lead to problems like:- The insurance policy expiring.
- Not being able to file for any claim, in case of damage caused to either your car or the third-party.
- Not being covered for hospitalization expenses or compensation in case of your demise due to an accident.
Documents required to transfer car insurance policy
Now that we know why car insurance policy should be transferred, here is an overview of the required documents:- Original registration certificate (RC)
- 3 Copies of Form 28 from relevant registering authority. It proves that the seller has no pending liability.
- 2 Copies of Form 29 to inform the Regional Transport Office (RTO) that the car is sold and all ownership and insurance documents have been transferred.
- 2 Copies of Form 30 confirming the transfer of ownership of the vehicle.
- 2 Copies of Form 35 from the seller’s bank to ensure they have cleared all dues on the vehicle purchase, if a vehicle loan is availed.
- No Objection Certificate (NOC), if you migrate the vehicle from one state’s RTO to another state’s RTO..
- Inspection report of the vehicle from the insurance company.
- Duly filled application form along with new and old policy documents.
- Passport-size photo and address proof of the buyer.
How to Transfer a Car Insurance Policy?
Once you have all the necessary documents, the next step is to inform the insurance company of your wish to initiate the transfer of the car insurance policy. The steps that need to be followed are–- Step 1: The seller must inform the insurance provider of their decision to make the transfer.
- Step 2: Submit all the necessary documents to the insurance company.
- Step 3: The buyer can choose add-ons on the policy and pay the additional premium.
- Step 4: Both parties should await the vehicle assessment for a successful transfer.
Also Read: How to check vehicle insurance status online
Disclaimer - This article is for information purposes only and should not be considered investment advice. Please consult your financial advisor and/or carry out your own research on any of your planned investments.
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FAQs
What is a third-party liability cover?
A third-party liability cover provides monetary compensation if damage is caused to a third party's car or property due to accidents. This, however, does not cover any damages caused by illegal driving in any manner.
What documents should I ensure to procure from the seller as a second-hand car buyer?
The most important document is the registration certificate. Apart from that, make sure to ask for the original invoice of the car, road tax receipts and a no-objection certificate from the car financier.
1. Is having term insurance better than getting a health insurance policy?
Term and health insurance both serve different purpose and are equally important. To secure yourself, availing both term and health insurance policies is never harmful.
