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When you decide to sell your vehicle to an eligible buyer or purchase a second-hand car from someone, certain level of documentation is required to ensure complete and proper transfer of the vehicle. A crucial part of ownership transfer is vehicle insurance transfer in addition to car’s registration certificate transfer. Many people find themselves wondering how to transfer car insurance to new owner while selling or purchasing a car.

Did you know that according to the Section 157 of the Motor Vehicles Act, both the buyer and the seller must ensure that car insurance transfer is done within 14 days of procurement of the vehicle?

If you are wondering about how car insurance transfer works or why is it necessary, keep reading.

Importance of Transferring Car Insurance Policy

You may be aware about the fact that a third-party insurance policy is mandated by the government to own a vehicle. Thus, there is no option of terminating the insurance plan and you have to renew it to keep using your vehicle legally. Additionally, a car insurance policy also safeguards you and your vehicle financially against unexpected events, including theft or accidents. However, if you no longer have the ownership of the car, you need to either terminate it or perform a car insurance name transfer.

Since it is slightly more convenient to transfer the insurance, most people opt for this option and often transfer car insurance online to the new owner. Likewise, if you are buying a second-hand car, it is crucial to learn about how to transfer insurance of car. This transaction formalises the withdrawal of the seller from an insurance policy, which is followed by the approval of the buyer. Vehicle insurance transfer is important to comply with the laws and ensure financial security.

How to Transfer Car Insurance from One Person to Another in India?

Here is the breakdown of how car insurance transfer takes place generally:

  1. Inform the Current Insurer
  2. The first thing you may want to do is inform your current insurance provider about the intended transfer. You may be required to share details about the new owner and the reason for transfer of the insurance.

  3. Get the Paperwork done
  4. You may need to fill out forms 28, 29, and 30 from the RTO's official website or get them from the regional office. After filling out the forms and submitting it to the RTO with the relevant paperwork, you may be required to get the clearance certificate from the RTO and proof of sale. After this, all the required documents need to be provided to the insurance company.

  5. Document Verification
  6. Both the buyer and the seller of the vehicle will need to submit documents required for verification, including proof of identity, proof of address, proof of sale, and a formal request for policy transfer. This is done to ensure that the transfer process adheres to regulatory norms.

  7. Inspection of the Vehicle
  8. Before proceeding further, the insurance provider may conduct the vehicle's inspection to assess its condition to determine the revised premium and coverage according to the vehicle's current state.

  9. Endorsement of the Policy
  10. After document verification and vehicle inspection, the insurance company proceeds to endorse the policy with updated details of the new owner. This serves as a legal acknowledgment of car insurance transfer.

  11. Transfer Fee Payment
  12. Some insurance providers may charge a nominal fee for a vehicle insurance transfer. Before the transaction is finalised, you need to pay the applicable fee to ensure a smooth transition.

  13. NOC from Financier (if applicable)
  14. If the car was financed, a No Objection Certificate or NOC from the financier may be required to complete the car insurance transfer process.

*Note: The new owner of the vehicle should receive a revised policy document soon after the process is completed. It is advised to review the document to ensure there is no discrepancy in it. Additionally, the previous owner of the vehicle is also advised to check the status of their policy and cancel it if the status shows active to avoid any complication.

What Happens if the Car Insurance Transfer Remains Incomplete?

You want to ensure complete transfer of your car insurance to avoid the following complications:

  1. Legal Repercussions
  2. In India, it is illegal to operate a vehicle without a valid insurance policy. The new owner of the vehicle risks inviting legal troubles if they choose to drive the car without adequate coverage due to incomplete transfer of insurance policy; this is especially true for third-party insurance.

  3. Claim Rejection
  4. In case your car is involved in an accident or gets damaged, the insurance provider can reject any claims if the policy details are not updated accurately. This leaves your vehicle uncovered and financially vulnerable.

  5. Policy Voiding
  6. In some cases, the insurer may void the insurance policy if the transfer process is left incomplete within a stipulated time.

Who is Responsible for the Transfer of Car Insurance Policy?

Both parties-buyer and seller-are responsible for a successful car insurance transfer. Here is a breakdown of how the responsibility for insurance transfer is distributed amongst the two:

  1. The seller is generally responsible for the following:
    • Inform the insurance provider about the sale and share necessary details with them.
    • Cancel the existing policy for the sold vehicle from their end.
    • Obtain an NOC from the financier if the vehicle is under a loan.
    • Hand over relevant documents to the new owner.
  2. The buyer is usually responsible for the following:
    • Provide all necessary documents, including identity and address proof and proof of sale.
    • Pay applicable transfer fee requested by the insurer.
    • Review the update policy documents after receiving them.

Wrapping Up

It is important to ensure 4-wheeler insurance transfer when the ownership of the vehicle is being transferred to avoid any legal problems and ensure financial security for the vehicle. During policy transfer, you may also consider adding certain covers, such as the Return to Invoice or RTI in car insurance, for value addition.

To own a vehicle, it is strictly necessary to have an insurance policy to cover for any damages inflicted on the third-party in case your vehicle is involved in an accident. However, a comprehensive insurance plan is recommended for financial security of your vehicle and yourself. For all vehicle owners, it is extremely important to understand how their insurance policy works and how to renew car insurance online.


Can I transfer my car insurance policy to another person?

Yes. Car insurance transfer is a necessary step in order to sell or buy a second-hand vehicle as it can attract legal troubles.

Do I need to pay a fee for car insurance policy transfer?

Some insurance providers may charge a fee to transfer your policy, but it is usually a nominal amount. You are advised to check with the insurer for any applicable fees.

Can I delay transferring vehicle insurance after purchasing a second-hand car?

No. It is not advisable to delay vehicle insurance transfer as driving a vehicle without insurance is a crime in India and you may be penalised heavily for it.

How long does the car insurance transfer procedure take in total?

The actual time taken for insurance policy transfer varies based on various factors; the procedure usually involves some paperwork, document verification, vehicle inspection, and endorsement of the policy. If you perform all the procedures required by the buyer and seller timely, it can expedite the process.

What documents do I need to transfer insurance policy?

Here is a list of documents that may be required to complete the vehicle insurance transfer:

  • Identity proof
  • Address proof
  • Duly filled form 28, 29, and 30 from RTO
  • Proof of sale
  • Formal request for policy transfer (usually in a written application)
  • NOC from the financier (if applicable)

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.

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