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What Can Happen if You Ignore the Transfer of Insurance for a Used Car?

Updated On Oct 15, 2023

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.

In India, second-hand cars have gained a lot of popularity over the past few decades. Most people opt to purchase used cars as they are more cost-effective and depreciate slowly as compared to brand-new ones. However, a lot of paperwork, such as the transfer of insurance to your name, is required in the process of purchasing a used car. 

A car insurance policy is a tool that protects you financially in case of any loss or damage to your vehicle. Moreover, it is mandatory by law to buy a third-party insurance policy for all vehicles, regardless of whether they are new or old. Therefore, after buying a used car, you must transfer the ownership of existing insurance documents to your name. In this article, you will find out what happens if you ignore the transfer of second-hand car insurance. 

What Can Happen if You Ignore the Transfer of Insurance for a Used Car?

Consequences of Ignoring Insurance Transfers For Used Vehicles 

Though we buy used cars to cut costs, it may lead to a financial burden if you don’t transfer the existing car insurance policy documents into your name. Listed below are some of the results that you may face if you do not transfer insurance for used cars. 

  • Claim Rejections:

In the event that you try to claim insurance that is still in the name of the previous owner, the car insurance company may reject your claims. 

  • Fines and Penalties: 

According to the Indian Motors Act, it is compulsory for all vehicles to buy an insurance policy up to third-party coverage. Therefore, if traffic police caught you driving without any valid insurance policy, you may have to pay a huge penalty. 

  • Financial Burden:

The insurance companies provide third-party coverage that can protect you in case of any damage done to a third party. However, if the car insurance policy documents are not transferred to your name, it may lead to a financial burden for you as you will have to pay damage expenses from your own pocket. 

  • Legal Worries:

According to the Motor Vehicles Act, you must obtain third-party car insurance on your used car; if you don't, you may face legal problems if a third person is injured in an accident.

Documents Required To Transfer Second-Hand Car Insurance Policies

Listed below are the documents that you should gather before taking ownership of insurance documents. 

  • The vehicle's registration certificate (RC).
  • Existing insurance documents.
  • Invoice for the car.
  • Obtain Forms 32 and 35 if there is a car loan that is currently active.
  • If the car is dual fuel, get a has a dual fuel certificate.

How Can You Transfer Second-Hand Car Insurance Policies? 

 Learn how to transfer used-car insurance in the below section. 

Step 1: Ensure you have all the necessary paperwork (the registration certificate, form 29 or 30, and the sale deed, as well as identification documents for personal use).

Step 2: Complete and submit the proposal form.

Step 3: Select a comprehensive car insurance policy that includes the required add-on coverage.

Step 4: If necessary to complete the insurance coverage, the surveyor will evaluate your car.

Step 5: The insurance will be changed from the former owner's name to yours after the inspection. 


It is unethical to travel without a valid car insurance policy on Indian roads. You can either transfer the existing policy documents into your name or you can apply for a new policy that can be customized as per your unique requirements.

Also Read: 

What Can Happen if You Ignore the Transfer of Insurance for a Used Car

Cashless Car Insurance Claims Explained


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.

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