Buying a used car or bike requires thorough effort and diligence. It's not only about selecting the brand, price, and model; ensuring all documentation is complete, especially the transfer of vehicle insurance, is vital. This guarantees the new owner is legally protected and can file claims if needed.

Importance of Insurance Transfer

Acquiring a pre-owned vehicle necessitates transferring the insurance policy to the buyer's name. This step ensures the insurance remains valid with new ownership. Retaining the insurance in the previous owner's name could result in rejected claims and significant financial losses.

Steps to Transfer Car and Two-Wheeler Insurance

1. Transfer Ownership of the Vehicle: Complete the vehicle ownership transfer at the Regional Transport Office (RTO). Necessary documents include the Original Registration Certificate (RC), a sale deed signed by both the buyer and seller, a No Objection Certificate (NOC) from the previous owner, and buyer's address proof along with passport photos. Submit Forms 28, 29, and 30 from the RTO website, obtain a Clearance Certificate post-submission.
2. Transfer the Insurance Policy: After ownership transfer, proceed with insurance policy transfer. Required documents are the original RC, RTO receipt for forms, NOC, buyer’s address proof and photos, the existing policy, and an insurance company’s vehicle inspection report. Submit documents to the insurer, pay any transfer fee, and receive a new policy in the buyer's name.

No Claim Bonus (NCB) Certificate

The No Claim Bonus (NCB) offers a discount on premiums for not making claims during the policy period. It belongs to the policyholder, not the vehicle, thus is non-transferable to the buyer but can be retained by the seller for a new purchase. The NCB discount increases annually without claims, up to 50% after five years.

Why Transfer of Car or Bike Insurance is Required

Protect Against Liabilities: Should you damage a third party or their property, insurance must be in your name for claim eligibility. Without transfer, the insurer won’t cover damages, holding you liable. Retaining the No Claim Bonus: Sellers may notify insurers about their NCB for discounts on new policies.

Consequences of Not Transferring Insurance

Legal and Financial Implications: Without insurance transfer, the insurer covers no losses, affecting third-party and own damages. Courts may hold previous owners liable in accidents with incomplete transfers. As per the Motor Vehicle Act Section 157, insurance policy transfer is mandatory within 14 days post-purchase. Automatically transferred is the third-party section; own damage and add-ons aren’t.

Importance of Vehicle Insurance

Be it a new or used vehicle, motor insurance is mandatory in India due to its financial safety measures in accidents, theft, or third-party property damage. Benefits include financial coverage for repairs, reduced liability in third-party damages, accident-related compensation, and medical expense coverage.

Steps to Transfer Insurance of Second-Hand Vehicles

1. Gather all necessary documents like the RC, sale deed, and insurance policy.
2. Initiate transfer post ownership change to avoid issues, adhering to deadlines.
3. Select comprehensive coverage with optional add-ons for extensive protection.
4. Submit all documents including Forms 29, 30, and the sale deed to the insurer.
5. The insurance company will assess the vehicle to finalize the transfer.
6. Upon assessment completion, receive the updated policy document.

Tips for Smooth Insurance Transfer

• Complete the insurance transfer within 14 days to avoid legal complications.
• Ensure the proposal form is accurately filled and submitted with the sale deed.
• Keep the Registration Certificate handy as it’s crucial for the insurance transfer.

FAQs About Insurance Transfer

Q: Can the No Claim Bonus be transferred to the buyer? A: No, the NCB is non-transferable and remains with the original policyholder. Q: What happens if insurance isn’t transferred within 14 days? A: The insurer will not cover any damages, and you could be liable for any incidents. Q: Is insurance transfer mandatory with vehicle ownership transfer? A: Yes, per the Motor Vehicle Act, transferring the policy to the new owner is required.

Conclusion

Transferring bike and car insurance is crucial when buying or selling a used vehicle, ensuring legal adherence and financial security for the new owner. By following these steps and having proper documentation, the insurance transfer process can be seamless and straightforward.