Learn the importance of transferring your car insurance policy with our complete guide. For more information, check out car insurance from Kotak General Insurance.
After much deliberation, have you decided to buy a used or second-hand car? Well, then you may look for the best model that suits your needs, find a seller, negotiate the price and complete the purchase. Lastly, you would transfer the registration certificate of the vehicle to your name. You think your job is done? Well, you may be missing one critical step, i.e., not transferring the car insurance policy from the previous owner to your name.
Most car buyers and sellers in India have little or no knowledge about the importance of transferring the car insurance policy. So, in this write-up, we discuss different aspects of car insurance transfer.
As the name suggests, car insurance transfer is the process of transferring the car insurance policy from one person to another. When you buy a second-hand car, you must make sure to get the car insurance ownership transferred from the seller to your name.
In other words, a car insurance transfer legally confirms the withdrawal of one party’s name from the car insurance contract and at the same time admits another person’s name. According to Section 157 of the Motor Vehicles Act, it is compulsory for both the parties (seller and the buyer) to the transfer the car insurance policy within 14days of registration.
Let us assume, you meet with an unfortunate accident after a few days of buying the car, and completing the RC transfer to your name from the previous owner. In such a situation, when you file a claim with your insurer for the damages to the third party or your own vehicle, the insurer will refuse to honour the claim.
As per the IRDA (Insurance Regulatory and Development Authority), a car insurance policy must bear the same name and address as mentioned in the registration certification. So, if you don’t get the insurance policy transferred, you cannot file a claim with an existing policy, even if you legally own the car.
This is because the insurance contract was made between the previous car owner and their respective insurance provider. The insurer is obliged to settle the claim filed by the legal policyholder and not someone who owns the vehicle.
Hence, when you buy a second-hand car, ensure that you get the existing car insurance policy transferred to your name.
Yes, transferring car insurance is critical from the sellers point of view. This is because you may be legally obliged to compensate for the losses suffered by the third-party, even if the new car owner gets involved in an accident.
When you sell your car, you must apply for a car insurance policy transfer with your insurer. To initiate the transfer, you must pay a transfer fee, and submit the following documents.
• Duly filled and signed application form
• Relevant transfer forms
• NOC (no objection certificate obtained from the insurer)
• Inspection report issued by the insurer
• Copy of new registration certificate
Once you raise a request for a car insurance transfer, and submit the necessary documents, the insurer will review the application and complete the transfer.
Car insurance transfer is a vital step when you buy or sell a car. If you hold a car insurance policy with Kotak General Insurance, and want to transfer it to someone, you can get in touch with the customer care representative and they will guide you through the entire process, and resolve all your queries.