What Is the Role of RTO in Car Insurance?

Every owner and non-owner of a vehicle must have heard of “RTO”. But why is it important? RTO, or Regional Transport Office, has multiple uses, which include managing records of vehicles, providing legal compliance, and aiding in processes related to car insurance. From verifying your vehicle registration to helping with ownership transfers, they play an important role in setting car insurance.

The RTO is the government office that handles vehicle registration and makes sure road safety rules are followed. Their role in car insurance includes:

1. Vehicle Registration Verification

• When you purchase a car, the RTO registers the vehicle and assigns it a unique registration number.
• Insurers use RTO records to validate vehicle details before issuing car insurance plans.
• The RTO issues a registration certificate (RC), which is necessary while availing an insurance policy.

2. Ownership Transfers

• If you sell or buy a used car, the RTO facilitates ownership transfer.
• Ensuring proper transfer is essential to avoid claim rejections under the new owner’s name.
• Without an updated ownership record, the previous owner may still be held liable for any legal disputes.

3. Enforcing Mandatory Insurance

• Every vehicle is lawfully required to have at least third-party car insurance.
• Before renewal of registration, the RTO makes sure that vehicles are insured.
• Driving an uninsured vehicle can result in heavy fines and legal consequences.

4. Providing Road Safety Awareness

• Vehicle owners are educated about the necessity of car insurance by the RTO.
• It conducts awareness campaigns and ensures people understand their legal responsibilities.

RTO records that are incorrect or outdated can cause difficulties with car insurance. Updating RTO records is crucial, and here is why - 

1. Rejected Claims

• If RTO records don’t match insurance details, insurers may reject claims due to discrepancies.
• Insurance companies rely on RTO records for claim validation, so any mismatch can lead to unnecessary disputes.

2. Ownership Transfer Issues

• If a vehicle isn’t officially transferred at the RTO, the previous owner might face legal issues for accidents caused by the new owner.
• It can also lead to complications in claiming insurance in case of damage or theft.

3. Delays in Insurance Renewals

• If your RTO details are outdated, renewing your insurance may take longer due to verification issues.
• Keeping your records up to date ensures a seamless insurance process.

Related Blog: How To Transfer Car Insurance To New Owner

Car insurance policies are impacted by a few functions of the RTO. Here are key areas where they are involved:

1. Issuing Driving Licences

• The RTO issues and renews driving licenses, ensuring that only trained drivers operate vehicles.
• A valid driving license is mandatory for claiming insurance in case of an accident.

2. Vehicle Registration

• An insurance policy can be purchased after a registration number is provided.
• Any modifications to the vehicle must be reported to the RTO for updating the insurance policy.

3. Helping in Inter-State Travel

• If you’re relocating, the RTO helps update vehicle registration, ensuring insurance remains valid.
• A no-objection certificate clearance is needed by the RTO to ensure seamless long-term interstate travel.

4. Maintaining Car Databases

• RTOs maintain databases of all registered vehicles, helping insurers verify car details.
• This database is also useful in cases of vehicle theft, accident claims, and legal disputes.

5. Issuing Fitness Certificates

• The RTO issues fitness certificates for commercial vehicles.
• If a vehicle is deemed unfit and not roadworthy, insurance claims may be rejected.

Also Read: Car Insurance Details by Registration Number

An easy check of RTO car insurance is possible through the online portal. Follow these steps:

1. Go to Parivahan Sewa: Visit Parivahan Sewa through the website of the Ministry of Road Transport and Highways.
2. Enter Your Vehicle Registration Number: Input your vehicle’s registration number plate details.
3. Access Your Insurance Details: View insurance validity, insurer name, and expiry date instantly.
4. Verify Ownership and Other Records: Ensure all details are correct and updated to avoid future complications.

The Regional Transport Office is a fundamental part of car insurance procedures in India. From registering vehicles to checking insurance, the RTO helps ensure road safety and follows the law. Keeping your RTO records updated is crucial to avoiding claim rejections, ownership disputes, and penalties.

For hassle-free car insurance, choose SBI General Insurance, known for its seamless claim process, extensive coverage options, and customer-friendly services. 

1. Why are RTO records essential for making car insurance claims?

RTO records verify vehicle ownership and registration details. If these records don’t match the insurance information, claims may get rejected.

2. Can I verify car insurance from the RTO?

Go to the Parivahan Sewa website, type in your registration number, and check your insurance details in an instant.

3. Is there a new rule by the RTO for new car insurance?

As per the latest regulations, new cars must have a minimum of three years of third-party car insurance at the time of purchase.

4. Is the car insurance premium affected by the RTO’s location?

Premiums vary by location; metro cities often have higher premiums due to increased traffic and accident risks.

5. What documents are needed by the RTO for car insurance?

Vehicle registration certificate (RC), pollution under control (PUC) certificate, fitness certificate (for commercial vehicles), and driving licence are key RTO documents needed for car insurance.

Disclaimer: This blog is intended solely for educational and informational purposes. The content may include outdated information regarding the topic discussed. Readers are encouraged to confirm the accuracy and relevance of the data before making any significant decisions. SBI General Insurance disclaims responsibility for any errors or consequences arising from the use of outdated information provided herein.