The question of transfer arises when you have sold or purchased a car not directly from the manufacturer or company authorized showroom. It is obvious that all the car-related documents are to be transferred to the new owner as and when the transfer takes place. But often, the car insurance transfer gets neglected. This is because though it is an essential and mandatory document, it is not directly related to the car itself.
With the secondary selling market of cars rising more than ever now, the transfer of vehicles is not limited between familiar parties. People from all walks of life living in varied geographical locations are making a deal, and hence it becomes necessary to take care of all the aspects of the transfer.
What is a car insurance transfer?
Before getting into the technicalities of car insurance transfer, online or offline, let’s have a look at what car insurance transfer is. The process of transferring the car insurance policy from the name of the seller of the car to the buyer is called car insurance transfer. It is vital to have a car insurance policy, at least a 3rd party car insurance
policy, when the vehicle is being used. This makes it a very crucial aspect because non-compliance with it can lead to legal contravention, and consequences can be severe.
In simple words, it is a process of withdrawal of the name of one party and substituting it with the name of another party who is now the owner of the vehicle.
Is there any time limit within which such transfer is to be made?
According to the regulations, it is mandatory for car insurance transfer online or offline within 14 days of the date of transfer of a vehicle.
If the previous owner had a third-party policy, the same should remain active for a period of 14 days from the date of transfer.
However, if the previous owner had a comprehensive policy, then only the third-party liability portion shall remain active for a period of 14 days from the date of transfer if the transfer of policy has yet not taken place.
If the seller fails to transfer the car insurance to the buyer within 14 days, the third-party liability shall stand withdrawn after 14 days automatically. After this, no claims shall be entertained under this policy.
What happens if the insurance policy is not transferred?
If the car insurance policy
is not transferred, the insurance company shall not accept any claims made by the new buyer; this is because the vehicle is registered in the name of the new buyer; hence registration certificate is in his name, and the policy is in the name of the old owner. As both the documents don’t carry the same name, the claim shall be denied.
It is essential to transfer the policy from the standpoint of the seller also as the seller shall be held liable to pay the damages if an accident occurs and third-party damages are to be paid.
It is important to note that when a transfer takes place, the ‘No Claim Bonus’ accumulated on the policy shall not be transferred. It remains with the old policyholder only. Also, ‘No Claim Bonus’ shall be settled as against the premium of own damage insurance only. As the policyholder, it is imperative to know how to claim car insurance
to enable quick remediation of claims when required.
How can you transfer the insurance policy?
Following documents shall be submitted to the insurance company to make a transfer of the existing insurance policy.
What documents are to be handed over to the new owner?
- Application Form
- Form 29
- Form 30
- No Objection certificate from the existing owner
- An inspection report from the insurance company
- Registration certificate in the name of the new owner
Frequently Asked Questions
Can I transfer my insurance to a new car during the policy term?
- New registration certificate
- Car insurance
- Original invoice of car
- NOC from financer
- Road tax receipts
You can transfer the insurance to a new car during the policy term provided your policy provider provides that facility and specific changes required are made in the policy and premium.
Can I transfer my insurance to a new car along with the existing ‘No Claim Bonus’ benefit?
‘No Claim Bonus’ shall never pass on the transfer of policy and is retained by the transferor only. Hence you can continue to avail the benefit of your ‘No Claim Bonus.’
“I am a seller of the car. Why shall I be interested in transferring the car insurance?” asks Manish
As a seller, you can be benefitted by the car insurance transfer, online or offline, in ways that, in case of any third-party liability arising after the transfer, you shall no more be held liable to pay those. Also, you can utilize your no claim bonus in your new car insurance policy and not miss any benefit of payment of lower premium.