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A detailed breakdown of the procedure for car insurance transfer

To buy a car – it’s everyone’s dream. But for many, buying a brand new first car may not be easy. The option? Buy a second hand car. Many people, who keep upgrading to new and better cars, sell their existing cars, which is a blessing for those looking to buy good cars at a cheaper price.

Buying and selling second hand cars is easy. However, the process of buying a second hand car doesn’t stop at the financial transaction alone. There are a lot of formalities that car owners need to fulfill in order to avoid risks and penalties. 

Apart from registration certificates, a crucial part of the process is the transfer of car insurance. Didn’t know much about it? We’ll tell you all you need to know.

  • What is car insurance transfer?
  • Why is car insurance transfer important?
  • How to transfer car insurance?
  • Key points to know
  • Auto insurance plans in India


What is car insurance transfer?

Car insurance is linked to the vehicle that is insured and not the owner of the vehicle. Hence, when a person sells a car, the insurance of that car has to be transferred to its new owner. 

Car insurance transfer is the process of transferring the existing car insurance policy to the new car owner. According to Section 157, it is mandatory for both parties involved to transfer the car insurance within 14 days of the date of sale of the car.


Why is car insurance transfer important?

Car insurance transfer is mandatory. Car insurance is required to avail claim benefits and hence a car owner should have car insurance in place at all times. E.g. B buys a car from A and delays the transfer of the car insurance. In this interim delay period, B meets with an accident while driving the car. The car is badly damaged but B would not be able to claim the insurance because the transfer process wasn’t completed.

Car insurance has two key parts – it provides own damage coverage and third-party liability coverage. Own damage coverage covers costs of damage to the car due to accidents caused by self. Third-party liability coverage provides cover to third parties – property or people – in case of damages caused to them in accidents caused by the car.


How to transfer car insurance? – The step-by-step process

The current owner of the vehicle can initiate the transfer process by contacting the insurance agent. Conversely, owners can initiate the process themselves online.

First, transfer the ownership of the vehicle

The transfer of registration certificate of the vehicle comes before the insurance transfer. 

Second, gather all the documents for the transfer of the insurance

According to the transport department, it is the current vehicle owner’s responsibility to ensure the transfer of the auto insurance to the new party. However, as a buyer of a vehicle, one must give utmost importance to insurance. To transfer auto insurance, it is important to have all the necessary documents in place. Here’s the list: 

  • New copy of registration certificate (Form 29). It is a notice of the transfer of a vehicle.
  • Old vehicle insurance policy documents
  • No objection certificate from the previous owner of the vehicle
  • Application form
  • Vehicle inspection report from the insurance company
  • No claim bonus difference amount
  • Other than the documents, the two parties have to settle the transfer fees, premium amount and balance of no–claim bonus.

Next, follow the insurance transfer process 

  • Collect forms 29 and 30 from the RTO’s office or download them from the RTO’s website.
  • Fill the form carefully and submit it to the RTO’s office.
  • Collect the clearance certificate from the RTO and the proof of sale.
  • Now, submit all the required documents to the insurance company.
  • Pay the fee.


Key points to know

  • The new car owner must ensure the transfer of insurance within 14 days of the purchase of the car.
  • It should be noted that for these 14 days, the third-party coverage is automatically transferred. The own damage coverage, however, gets transferred only when the insurance policy transfer is complete.
  • If the new car owner fails to get the insurance transferred in these 14 days, the insurance company is not liable to reimburse any claims made by any of the owners.
  • Non-transfer of car insurance is dangerous for both the old owner and the new owner. In case there is an accident caused by the new owner and the insurance hasn’t been transferred, the old owner could get a legal notice by third parties for damages caused during an accident.
  • In the situation where the insurance has been transferred but the transfer in the registration certificate is pending or the proof of the transfer has not been submitted to the insurance company, then the new owner has to provide a proof of transfer of registration certificate in order to avail claim money.


Auto insurance plans in India

Bajaj Allianz Car Insurance

Future Generali Car Insurance

HDFC Ergo Car Insurance

Kotak Mahindra Car Insurance

Reliance General Car Insurance

Tata AIG Car Insurance


Over to you

It is important for those wanting to buy an old car or those who have bought one, to understand the criticality of car insurance transfer. It is a part of buying a car that should not be taken lightly. If you’ve understood the importance of it, well done! And if you’re wondering where to start looking for the right car insurance, we’ll help you out.


FAQs: Car Insurance

Why is car insurance transfer critical?

Car insurance transfer is important for both the seller and the buyer for many reasons. Non-transfer of car insurance is dangerous for both the old owner and the new owner. In case there is an accident caused by the new owner and the insurance hasn’t been transferred, the old owner could get a legal notice by third parties for damages caused during an accident.

How long does it take to transfer car insurance from one owner to the other?

Typically, car insurance should be transferred within 14 days of purchasing the car. It should take between 3 or 4 days to 14 days.

What happens if I buy a second hand car and do not transfer car insurance?

Car insurance is mandatory. In case you do not get the insurance transferred after buying a second hand car, the insurance company won’t be liable to pay for any damages. Moreover, third parties could file a legal suit against you in cases of accidents, the damages for which would have to be paid from your pocket.

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