Can Car Insurance Be Transferred From One Person to Another?

Posted:

29 March,2023

Updated:

15 February,2024

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Considering selling your car or transferring ownership to a family member or friend? One crucial aspect to consider is the transfer of Car Insurance from one person to another. Understanding the process and importance of transferring Car Insurance is essential to ensure that the vehicle remains adequately covered and legally compliant. In this blog, we'll delve into the key factors and considerations involved in transferring Car Insurance from one person to another, providing valuable insights to help you navigate this process seamlessly.

 

Why should I do a Car Insurance name transfer?

When selling your car, you can choose to transfer the insurance policy to the new owner's name or cancel it. If cancelling the policy is not your intent, a name transfer to the new owner is necessary, and here's why.

 
  • A Car Insurance name transfer is necessary when the ownership of a vehicle changes. It ensures that the new owner is covered and legally allowed to drive the vehicle.
  • Transferring the insurance name helps in avoiding any legal complications that may arise if an accident occurs and the vehicle is still insured in the previous owner's name.
  • It allows the new owner to tailor the insurance policy to their specific needs and driving habits, potentially resulting in cost savings or better coverage.
  • Car Insurance name transfer creates a clear record of the change in ownership, which can be essential for proving ownership during certain situations, such as selling the vehicle or filing a claim.
 

Process of transferring Car Insurance

Transferring Car Insurance in India involves a systematic process to ensure a smooth transition of coverage from one individual to another. Here's a detailed look at the steps involved.

 

A. Documentation required

  1. Sale agreement: A comprehensive sale agreement is crucial for initiating the transfer process. It should include details about the vehicle, sale price, and terms and conditions agreed upon by the buyer and seller.
  2. Transfer forms: Specific forms provided by the insurance company need to be filled out accurately. These forms typically include details about the new owner and their relationship with the previous owner.
  3. Original insurance policy: The original Car Insurance Policy, along with a copy, must be submitted. This includes the policy document and any endorsements or addendums.
  4. Registration Certificate (RC) transfer: The RC book, which proves ownership of the vehicle, needs to be transferred to the new owner's name. This is a critical document for the insurance transfer.
 

B. Steps Involved

  1. Informing the insurance provider: The first step is to inform the insurance company about the intent to transfer the policy. This can usually be done by contacting the customer service helpline or visiting the nearest branch.
  2. Submission of necessary documents: Once the sale agreement and transfer forms are filled out, they need to be submitted to the insurance company. Ensure that all details are accurate to avoid any delays in processing.
  3. Policy adjustments and premium considerations: The insurance company will review the documents and make necessary adjustments to the policy. Premiums may be recalculated based on factors such as the new owner's driving history and the type of coverage desired.
  4. Endorsement of policy: An endorsement is issued by the insurance company, officially confirming the transfer of the policy to the new owner. This document is an essential part of the updated insurance record.
 

By following these steps diligently, Indian drivers can successfully transfer their Car Insurance, ensuring that the new owner is adequately covered and compliant with legal requirements. It's essential to stay in communication with the insurance provider throughout the process to address any queries and facilitate a seamless transfer.

 

NCB and Car Insurance transfer

When transferring Car Insurance to a new owner, the No Claim Bonus (NCB) typically does not transfer with the policy. The new owner will need to build their own NCB over time by maintaining a claim-free record. However, if the previous owner purchases a new car and Car Insurance, they can usually transfer their accumulated NCB to the new policy and benefit from the associated premium discounts. It's important to review the specific policy terms and conditions with the insurance provider when transferring Car Insurance to a new owner to understand the NCB implications and eligibility.

 

Who is responsible for transferring Car Insurance?

As per Section 157 of the Motor Vehicles Act, 1988, the seller of the car is responsible for ensuring the transfer of the existing four-wheeler insurance policy to the new owner of the car within 14 days of the sale of the vehicle. If the transfer is not carried out within the stipulated time, the new owner will have to purchase a new insurance policy for the vehicle.

 

In a nutshell

When it comes to the transfer of Car Insurance from one person to another in India, several key considerations and a systematic process come into play. Car Insurance name transfer is crucial when the ownership of a vehicle changes, ensuring that the new owner is adequately covered and legally compliant. The process involves specific documentation, informing the insurance provider, and addressing policy adjustments and premium considerations. Additionally, it's essential to understand the implications of No Claim Bonus (NCB) during the transfer and review policy terms to ensure a seamless transition.

 

Key highlights

  • The transfer of Car Insurance is necessary when selling a car or transferring ownership to ensure the new owner is covered and comply with the legal requirements.
  • The process involves documentation such as a comprehensive sale agreement, transfer forms, the original Car Insurance Policy, and the Registration Certificate (RC) transfer.
  • Essential steps include informing the insurance provider, submitting necessary documents, addressing premium considerations, and obtaining an endorsement of policy certifying the transfer.
  • When transferring Car Insurance, the No Claim Bonus (NCB) typically does not transfer with the policy to the new owner.
  • As per Section 157 of the Motor Vehicles Act, 1988, the seller of the car is responsible for transferring the existing four-wheeler insurance policy to the new owner within 14 days of the sale of the vehicle.
  • Understanding the process and responsibilities involved in transferring Car Insurance from one person to another is vital to ensure a successful and compliant transition of coverage.
  • It's advisable to engage with the insurance provider and adhere to legal requirements to facilitate a seamless transfer and maintain adequate protection for the vehicle and its new owner.
 

FAQs

Read ahead for responses to frequently asked questions on Car Insurance transfers.

 

1. Is it necessary to transfer Car Insurance when selling a car?

Yes, it is essential to transfer Car Insurance when selling a car to ensure that the new owner is adequately covered and legally compliant. Failure to transfer the insurance within the stipulated time could result in the new owner having to purchase a new insurance policy for the vehicle.

 

2. Can the No Claim Bonus (NCB) be transferred to the new owner when transferring Car Insurance?

Typically, the NCB does not transfer with the policy to the new owner. The new owner will need to build their own NCB over time by maintaining a claim-free record.

 

3. What documents are required for transferring Car Insurance to a new owner?

The documents required may include a comprehensive sale agreement, transfer forms provided by the insurance company, the original Car Insurance Policy, and the Registration Certificate (RC) transfer to the new owner's name.

 

4. Who is responsible for initiating the transfer of Car Insurance to the new owner?

As per the Motor Vehicles Act, 1988, the seller of the car is responsible for ensuring the transfer of the existing Car Insurance Policy to the new owner within a specified timeframe.

 

5. How can the insurance company be informed about the intent to transfer the policy?

The insurance company can usually be informed about the intent to transfer the policy by contacting the customer service helpline or visiting the nearest branch and following the process outlined by the insurer.

 

6. If I'm purchasing a used car, how can I ensure that the Car Insurance is transferred to my name?

As the new owner, it's important to ensure that the seller initiates the transfer of the existing Car Insurance policy to your name within the specified timeframe to maintain continuous coverage for the vehicle.

 

Disclaimer: The content presented in this page is intended solely for general informational purposes and should not be regarded as a substitute for expert insurance advice. Therefore, it is imperative to seek personalised guidance from a certified insurance professional to address your specific needs and circumstances.

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