Is It Important To Transfer Four-wheeler Insurance When Selling Your Car?

By Author: Sing pavan
Total Articles: 1
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During the sale or purchase of a used car, various documentation requirements need to be completed by both parties. One of them also involves the transfer of your car insurance policy to the party purchasing this vehicle. Nevertheless, the requirement, importance and process of transferring car insurance to the one purchasing the used car is hardly common knowledge. Those involved in the purchase or sale of a second-hand car must be aware of both the process and importance of transferring car policy from the existing owner to the new owner.
Hence, we bring a detailed guide that should help understand why it is important to transfer car insurance to the new owner. Also, we will take a look at other pertinent details related to four wheeler insurance, including the process of such transfer.
Importance of Transferring Car Insurance Policy to the New Owner
When selling a used car after the purchaser has been finalised, one of the essential things the old owner has to do is to initiate the transfer of their car’s insurance policy to the purchaser. It is typically important to initiate such a car insurance policy ...
... transfer as the liabilities arising thereto are legally binding and may lead to grave liabilities for both parties in case a claim arises. The importance of transferring the car insurance policy from the seller to the buyer is elucidated below.
- For the seller
If the previous owner of the vehicle sells the car but does not transfer its insurance policy to the new owner, various liabilities arising out of any road incident can have a bearing on the seller. For instance, if the car meets with an unfortunate accident after the sale, but the insurance policy remains in the old owner’s name, guess what legal incidence it will create. Simply put, since the previous owner of the car is still the four wheeler insurance policy owner, the accountability of any liability arising will be on the old owner. It is not only legally undetermined and confusing but can also be financially draining for the old owner.
Missing out on transferring such insurance ownership also deprives the seller of any concession they may get on the purchase of their new car’s insurance. Such concessions are otherwise applicable if the seller had any accumulated NCB on the previous policy.
- For the buyer
In the case of the buyer too, failing to obtain the transfer of car insurance from the previous car owner can have severe legal and financial consequences. For one, the absence of their name on the insurance policy documents deprives them of any claims against car liability due to road incidents. Plus, driving a car without a valid third-party car insurance is prohibited under the Motor Vehicles Act of India and leads to penalties.
Who Needs to Transfer Car Insurance?
Ideally, the seller should initiate the transfer of the car insurance policy while transferring the vehicle’s RC to the new owner at the onset. The buyer of this vehicle must also ensure that such a process has been initiated fill up the necessary forms and undertake any process that involves such a transfer.
The Process of Car Insurance Transfer
A seller can initiate a car insurance transfer to the new buyer in the following few steps.
1. Request the insurance provider to transfer vehicle insurance to the buyer with the payment of applicable fees.
2. Also, obtain Form 29 from the RTO’s office or website.
3. Retrieve old documents of policy ownership and obtain an NOC of such transfer to hand over to the buyer.
4. Apply for such transfer along with an insurance report and an NCB report obtained from the insurer.
Assessing these critical angles to the transfer of car insurance policy and its importance thereto, it should now not be a question whether you must or must not transfer vehicle insurance. It is equally essential for the buying party to assess all aspects related to the 4 wheeler insurance applicability of the car they are purchasing. For instance, they must assess if the car had been covered under such insurance through and through and if the policy was renewed in time. Ensuring to check such aspects will assure that the purchaser does not undertake any undealt legal liability that may come along with the vehicle when purchasing a used car.