What Can Happen if You Ignore the Transfer of Insurance for a Used Car?
Published On Jan 14, 2021 11:00 AM By InsuranceDekho
The market for used cars is always on the rise, either for cost benefits or for sentiments. But while choosing to buy a used car, it is important to transfer the insurance along with the ownership at the earliest.
While buying a used car, there are certain important procedures to be followed post its purchase. One such important procedure is the transfer of the vehicle’s insurance under the name of the new owner. If this is not done, then both the new owner and the seller will face unwanted trouble. As per the Indian Motors Vehicle Act, it is considered a serious offense to drive a vehicle without valid insurance. Under Section 157 of this act, the new owner of the car must transfer the vehicle insurance under their name within the first 14 days of making the purchase.
What Happens if the Transfer of Insurance of a Used Car is Ignored?
If the insurance is not transferred within 14 days after the purchase of the used vehicle and the owner meets with an accident, then the car insurance company will not be liable to settle any claims. While transferring the policy, the third party aspects also will get transferred automatically. And if the used car doesn’t come with insurance, then it is mandatory to buy a second-hand car insurance policy to stay covered under all circumstances.
Transferring the insurance policy to the name of the new owner is mandatory to avoid any financial implications, in the event of meeting with an accident. Things to consider while transferring the insurance policy of a used car are as follows:
1. Insurance transfer: Soon after purchasing the used car, the insurance policy should be transferred in the name of the new owner. The maximum deadline for this is about 14 days.
2. Procedure for Policy Transfer: To make the policy transfer easy and hassle-free, the new vehicle owner should submit a fresh proposal form along with the evidence of the sale and the transfer of registration certificate. These forms, duly signed by the old owner, should be submitted by the new owner along with the transfer fee and the policy copy to the insurance company. Only then will the insurance company pass the insurance transfer procedure.
3. Initiating Policy Endorsement: Changing the ownership in the RC, takes time at the transport office, but by submitting these documents, the insurance company will perform the endorsement. After the new registration certificate is issued by the transport office, a copy of it should be submitted to the insurance company, to avoid any confusion with the future claims process.
Process of Transferring the Used Car Insurance
The process of transferring the car insurance of the used car to a new owner is easy and requires the following documents to be submitted for a hassle-free process.
- The old insurance policy document
- Form 29 or copy of the new registration certificate
- No objection certificate from the previous policyholder
- Proposal form
- Inspection report after the insurance company performs the inspection
The new policy owner has to pay a nominal policy transfer fee and No-Claim Bonus recovery as applicable.
The choice of continuing with the same insurance company, or choosing a different provider lies with the new owner of the car. But it is important to have insurance for the vehicle soon after purchasing it.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.