Transfer of car insurance plan when buying a 2nd hand car


02 Aug 2023

Reasons why Transfer of car insurance plan when buying a 2nd hand car

Buying a used car brings with it a number of considerations and one of the most important is the transfer of car insurance. When you buy a new car, you will be offered a 3-year long-term insurance policy mandated by the IRDAI. But when you buy a second-hand car, the process isn’t as straightforward. It is important to understand why the process is necessary and what you should do as the buyer in order to ensure that you are adequately covered.

Why do you need to transfer car insurance policy under your name?

If you buy a used automobile, you must get the current insurance coverage changed to your identity in order to prevent any future legal obligations. If you have a road accident with your used automobile that results in any third-party liability, you will be unable to submit a new third-party claim since the policy was not changed to your identity. As a consequence, you will be on your own to settle off your third-party commitments.

Likewise, if you sell your automobile, you must move the current vehicle insurance plan from your identity to the current owner's identity. If you do not, you could be held accountable for the current owner's third-party unintentional liability since you remain the insured on the sold car's insurance plan.

Also, it is legally necessary to have a valid car insurance plan in your name when you buy a pre-used or a 2nd hand car. So, you need to transfer the existing car insurance plan in your name or buy a fresh plan for yourself.

Documents needed to transfer car insurance policy:

If you wish to transfer the existing car insurance plan from the previous owner to yourself, you need to first transfer the registration certificate of the car to your name. Post that, you need to submit some documents to the insurer.

Here are the documents required for auto insurance transfer:

1. Registration certificate or Form 29 copy

2. Old auto insurance policy papers

3. Last policyholder’s NOC

4. New application form

5. Report of inspection issued by the insurance provider

6. Difference amount of the policy’s no-claim bonus

Who is responsible for car insurance transfer?

According to Section 157 of the Indian Motor Vehicles Act of 1988, the individual who sells the automobile is liable for ensuring that the current four-wheeler insurance coverage is transferred to the new vehicle owner. The transfer must be completed within two weeks of the vehicle's sale. The third-party insurance on the automobile is immediately transferred and stays current for the initial two weeks after purchase.

Nevertheless, the standalone own-damage protection will not become active until the policy is transferred from the former owner to the current owner of the vehicle. If the transition is not completed within two weeks of the car's purchase, the third-party coverage will expire on the 15th date.


Buying a second-hand car often means saving money, but it also requires taking extra steps to protect yourself from the risks of purchasing a used vehicle. Ensuring that your car is covered with an appropriate insurance policy is one of the most important steps. However, transferring car insurance when buying a second-hand car can be tricky. The above pointers can help you understand the process.

Alternatively, you can choose to opt for a fresh car insurance policy for yourself as soon as you have the registration certificate. That way you can transfer your previous no-claim bonus from your erstwhile car as well.

Visit Kotak General Insurance for More Information.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.