Car Insurance Transfer to New Owner: Everything You Need to Know
When you sell your car, you must make sure that you fulfil all the duties as a seller and provide the buyer with the necessary documents. One such document without which the new owner will not be able to legally drive your vehicle on the Indian roads is car insurance. To make your life easier, here is everything you need to know about how to transfer car insurance to new owner.
What is the car insurance transfer process?
The process of car insurance name transfer works along with the transfer of ownership of the car. Once the new owner buys the car, the policy of the previous owner, that is you, does not remain valid. According to the Insurance Regulatory Development Authority OF India (IRDAI), if a person wants to file a motor insurance claim, then the name and address on the registration and vehicle insurance documents have to match. This is so because, in an emergency, it becomes easier for the new owner of the vehicle to recover the cost of any damage.
To initiate a car insurance transfer, you must submit the following documents along with a transfer fee of Rs 50:
The new copy of the registration certificate/ Form 29
Documents of the old policy
No Objection Certificate (NOC) from the previous policyholder
New application form
Inspection Report as has been carried out by the insurance company
No Claim Bonus (NCB) difference amount
What is an NCB retention letter?
An important aspect while initiating a car insurance name transfer to a new owner is the No Claim Bonus (NCB). While you sell your car, you sign over the registration and insurance details. However, an exception to this is the No Claim Bonus. NCB is essentially a reward from the insurance company to safe drivers for not making any claims. When an old insurance policy gets cancelled, NCB gets transferred to a new car. To counter this transfer, you, the previous policy owner, can produce an NCB retention letter to the new insurers and enjoy discounts on insurance premiums.
To obtain an NCB retention letter, you must submit the following documents:
Letter requesting policy cancellation
Original copy of the policy and certificate of insurance (also known as Form 51)
Notice of transfer of ownership of motor vehicle known as Form 29
Application for intimation and transfer of ownership of motor vehicle known as Form 30
Photocopy of registration certificate book with the name of the new owner
Proof the car has been delivered to the new owner
When you are selling your car, remember that to the new buyer, even buying a used car is a new investment carried out with thought and planning. Thus, when you sell your second–hand car, it is your duty to ensure that along with the transfer of a vehicle, you also execute the transfer of rights and four–wheeler insurance.
If you are purchasing a second–hand vehicle, please read all the documents carefully and ensure that appropriate rights have been transferred to you before concluding a sale.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.