Selling or buying a pre-owned car doesn’t end with handing over the keys. It also means taking care of the car insurance. Yes, when selling or buying a second-hand car, you also need to transfer the car insurance. Failing to do so can result in claim rejection if an accident occurs before the transfer is completed.
As per the law, the car insurance transfer must be completed within 14 days of ownership transfer. Through this guide, Generali Central provides you with a car insurance checklist to help you complete the process smoothly and without missing any important steps. Find out what all must be checked before you transfer the car insurance policy.
What is Car Insurance Transfer?
The Motor Vehicle Act of 1988 makes it mandatory for all vehicles in India to have a minimum of third-party liability car insurance. When a pre-owned car is sold to a new owner, the existing insurance policy, if still valid, must also be transferred to that owner.
The task of transferring the car insurance to the new car owner must be done within 14 days of transferring the car's ownership. Section 157 of the Motor Vehicle (MV) Act of 1988 gives a 14-day grace period to the pre-owner of the car to transfer the insurance policy to the new owner.
Checklist for Car Insurance Transfer
If you are planning to purchase a pre-owned vehicle or sell yours to someone, here is a checklist reference for you. This checklist is dedicated to the car insurance policy transfer to the new car owner.
1. Inform Your Insurance Provider
Notify your car insurance provider immediately about the sale or purchase and your intent to transfer the policy. It gives the insurance company enough time to update policy records and process the transfer on time.
2. Collect Required Documents
A car insurance policy transfer may require documents like
- Registration certificate (RC)
- Original policy documents
- Identity proof of the pre-owner
- Identity proof of the new owner
- Previous no objection certificate
- The sale deed
- Pollution under control (PUC) certificate
- Certain forms
3. Application for Policy Transfer
The existing policy owner may be required to submit an application for policy transfer. Upon successful submission and verification, the policy is transferred to the name of the new car owner. You may either do this process by visiting a nearby office of your insurance provider or opt for a car insurance transfer online.
4. Pay Transfer Fees
Transfer of car insurance may also require payment of a fee. So, the involved parties may pay the transfer fee on time to further lead the process of transfer.
5. Verify the NCB
You must note that even if the car insurance policy is transferred, the NCB remains intact with the previous owner. It is a reward for the vehicle owner for maintaining the vehicle in good condition. So, it is not transferred and must be confirmed upon insurance transfer.
No Claim Bonus or NCB is rewarded to a car owner when they make no claim in a policy year. It keeps increasing (up to 50%) with each consecutive claim-free year. Vehicle owners can use NCB to get discounts on the upcoming premium.
Know how you can renew your expired car insurance policy.
6. Copies of Record
Both parties may keep a record of the documents and policy transfer for any future reference. Both the pre-owner and the new-owner may keep copies.
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Benefits for Car Insurance Transfer Checklist
A checklist makes it easier to follow the given process. Multiple benefits of using a car insurance transfer checklist are:
1. Nothing is Missed
With so many steps involved, it’s easy to overlook details. So, rather than keeping things in mind, having a checklist makes things streamlined. It ensures you don't miss out on anything important.
2. All Documents in One Place
A checklist keeps track of all the documents required, helping you confirm that everything is in order before submission.
3. No Delay in Policy Transfer
Legal processes often come with back and forth, which consumes a lot of time. By preparing in advance with a checklist, you can avoid unnecessary delays in policy transfer.
4. Peace of Mind
A car insurance policy transfer checklist gives you the peace of mind that everything has been arranged and done properly.
To Conclude
Transferring a car insurance policy may seem simple; however, it is a crucial aspect of selling or buying a pre-owned car. The purpose is to keep the car insurance benefit active and provide complete car protection to the new owner. By following a simple checklist, the car insurance transfer can be quite helpful in ensuring nothing is left to be checked.
At Generali Central, we’re here to make every step of your insurance journey smooth and transparent. Choose the car insurance policy that best protects your vehicle and your peace of mind.
