Car insurance transfer is the legal process of shifting insurance coverage from one person to another when a car is sold or bought. It is essential to avoid legal liabilities and ensure proper ownership. If you’ve recently purchased or sold a second-hand car in India, knowing how to transfer car insurance properly is essential, especially now that it can be done online with minimal hassle.
This guide will walk you through the car insurance transfer process, outlining what documents are needed, how much you must pay, and what mistakes you must avoid. Whether selling or buying, you have come to the right place.
Why Transferring Car Insurance is Important
The motor insurance transfer must occur with the ownership change when selling a vehicle. Failing to transfer vehicle insurance means the new owner cannot claim insurance benefits. Further, if the policy is not assigned, the old owner could still be held liable in the event of an accident.
When selling a vehicle, transferring vehicle insurance and ownership is crucial. Without this, Ensuring the timely transfer protects both parties from legal and financial complications.
Significant reasons for transferring your policy:
- Compliance with the law under the Indian Motor Vehicles Act.
- Eligibility for claiming by the new owner.
- Safeguarding from financial liabilities.
- Maintenance of benefits under current coverage.
- Maintenance of benefits under current coverage.
Explore various types of car insurance that apply in second-hand vehicle cases.
Step-by-Step Process to Transfer Car Insurance Online
Here’s how to transfer car insurance online easily—just follow these five steps. It also helps when you efficiently transfer car insurance to another car.
Step 1: Apply for RC Transfer
Insurers won't sanction the motor insurance transfer process without an updated RC in your name.
Before initiating the car insurance policy transfer, you must apply for a Registration Certificate (RC) transfer at the closest RTO (Regional Transport Office). This will make you the new lawful owner of the vehicle.
Insurers won't sanction the motor insurance transfer process without an updated RC in your name.
Documents Required to Transfer RC:
- The sale agreement between the seller and the buyer
- Original RC Copy of the former owner
- Insurance Policy of the former owner
- Duly filled and signed Form 29 and 30 (obtainable at RTO or online)
- Valid Pollution Under Control (PUC) Certificate
- Receipts of Road Tax Payments
- Identity and Address Proof (Aadhar card, Passport, Voter ID, etc.)
Visiting the RTO in person can often speed up the process in most Indian states.
Timeframe: An RC transfer typically takes 15–30 working days, depending on the RTO's processing speed.
Step 2: Inform the Insurance Provider
After you register for the RC transfer, alert your car insurance company to the change in ownership. Most companies, such as Universal Sompo, offer the facility to notify them through their online customer portal.
You can also make use of this time to:
- Modify the nominee information
- Choose add-ons
- Switch to a new coverage plan
Complete this step within 14 days of the purchase of the vehicle to provide cover without a break.
Step 3: Submit Required Documents Online
To complete the car insurance transfer online, you will need to upload the scanned documents below:
- New RC or Sale Agreement
- Current car insurance policy
- PAN card and address proof
- Forms 29 and 30
- No Objection Certificate (if required)
This is an essential step for both sellers and buyers. If you are selling the car, ensure that the new owner completes this step so that you are not responsible for any insurance claims. Additionally, if the buyer wishes to switch providers, they should promptly transfer car insurance to another company to maintain uninterrupted coverage.
Step 4: Pay Transfer Fees and Get Inspection
After that, pay the applicable car insurance transfer charges through your insurer's online portal. The charges may vary based on the service provider and policy, but typically range from ₹200 to ₹500. This payment is essential to officially transfer ownership of the car insurance to the new owner.
The insurer may also arrange an online or in-person vehicle inspection to confirm the car's condition.
Need to know what factors affect car insurance premiums? Click here for an in-depth explanation.
Step 5: Receive the Transferred Policy with Updated Details
After successful document verification and fee payment, the insurer will process the car insurance policy transfer. You’ll receive the digitally updated policy document that includes:
- New owner’s name
- Updated vehicle registration details
- Nominee information
- Add-ons (if opted for)
This formally completes the transfer car insurance to another person process. The new policyholder now benefits from all terms in the old policy, including personal accident cover, third-party liability cover, and own damage benefits (where applicable).
Important: As the seller, ensure you obtain written notification from your insurer that your name has been removed from the policy to avoid future liabilities.
Tips to Ensure a Smooth Online Transfer
Although the car insurance transfer process has become easier with online systems, here are some quick tips to help you avoid common pitfalls and ensure a smooth experience:
Initiate the Transfer Early
Do not delay past 14 days after the sale. Delays may result in claims rejection or even render the insurance cover null and void.
Secure the NCB Certificate (For Sellers):
No Claim Bonus (NCB) is attached to the owner, not the vehicle. Sellers should apply for an NCB certificate and present it to their new insurer to get discounts on their next policy.
Check the Vehicle’s Insurance History
Check the vehicle’s claim history to spot any gaps in coverage or potential premium hikes.
Verify Insurer Network Coverage
If buying a vehicle from another state, ensure the insurer’s garage network covers your area.
Align RC and Policy Dates
The insurance policy's effective date and the new RC's date of issue must coincide to avoid arguments or claims denial.
Considering Switching Insurers?
If you are unhappy with the existing provider or want better coverage or rates, you can switch car insurance to another company upon renewal. Remember to:
- Compare quotes between insurers
- Keep your NCB benefits
- Check claim settlement ratios
Look at motor insurance plans from Universal Sompo to see safe options with excellent benefits and ease of online use.
Conclusion
Knowing how to transfer car insurance can save you time, legal issues, and stress in the car handover process. With digitisation, it is also faster and more precise than ever before. Whether you're looking to transfer car insurance to a new owner, another vehicle, or even another insurer, knowing the proper documentation and timelines ensures you're always protected.
Visit Universal Sompo Motor Insurance to start your online transfer today.
FAQ
The original RC or the updated sale agreement is essential to prove that the ownership has legally changed. Insurers require this before initiating the motor insurance transfer.
Yes. Car insurance transfer charges are generally a one-time fee, depending on your insurer and the type of vehicle.
The No Claim Bonus (NCB) is not transferable to the new owner. However, the seller can retain it by requesting an NCB certificate from the insurer and using it to get a discount on the following policy.
If the policy is not transferred, the previous owner remains legally liable for third-party claims or accidents, even after selling the car. This is why prompt transfer is critical.
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