“Life Insurance is like a parachute, if you don’t have it when you need it, you will never need it again” We heard that you recently brought a second-hand vehicle. Have you transfer the insurance to the buyer’s name after selling the car?
Vehicle insurance transfer is important when you sell your car to a second-hand buyer. When you sell the car the ownership of the car falls in the hands of the new buyer. And so does insurance.
It is important to make sure that the car insurance policy gets transfer from the original old owner’s name to the new buyer. The buyer of the car should always keep in mind to immediately initiate the insurance transfer process once he obtains all the documents of the purchased vehicle. The car insurance transfer process can be carried out at the office of the insurer.
For the past few years, there has been a rapid increase in the demand for used cars in India. The car sales of old vehicles have become very common these days. However, it’s not an easy process to find the right buyer who is willing to pay the desired amount for your car.
“Once I sell my car, how do I transfer the Insurance policy?
Proper documentation work is important and it should follow during the vehicle deal, it helps in ensuring that you don’t have any of the liabilities associated with your car.
To make the entire process easy make sure you divide the procedure into a couple of parts so that it makes your work easier.
Once you finalize the deal with the buyer, you should make sure that you obtain their signatures on what is known as a sale affidavit and a delivery note. Firstly, you should attach copies of the buyer’s identity proof; like PAN card, passport, address proof like Aadhar card, and the Cheque or any of the receipts as payment proof. The sale affidavit should always be notarized after it’s signed by the buyer. All these proofs and documents act as an agreement of transfer of all the liabilities related to your old car to the new owner. These documents will make sure that your transfer of ownership is legal; gets done under the scanner of the government.
Secondly, there are some RTO documents that are required for the transfer of the ownership and Insurance policy transfer.
• Form 28- It is an application that is required for obtaining NOC from the registration authority; and also acts as proof that you no longer hold any liabilities that might prevent you from selling your car.
• Form 29- It is basically a note that states the information related to the transfer of the vehicle by the seller to the RTO. The document also states that the seller has handed over all the vehicle-related documents, registration certificate, Vehicle Insurance to the buyer.
• Form 30- This document acts as a supporting document to Form 29; a transfer of ownership of the vehicle finishes and all the legal liabilities of the car now belongs to the new buyer.
• Clearance Certificate- This document gets submits to inform the RTO that the car has been sold.
Transfer of Car Insurance policy
It is important and mandatory to transfer the car insurance from your name as soon as you sell the vehicle. However, the No Claim Bonus that is accumulated in your insurance policy should be transferred to your name; so that the insurer knows that you’re selling the car. Now, this No Claim Bonus you will use for the new vehicle that you will purchase in the future; while the transfer of the Insurance policy will help you avoid any legal issues that might trouble your old car.
Once the transfer of the vehicle owners with an insurance policy starts; the new owner of the vehicle need not have to take a new insurance policy. The new owner must inform the insurance company about the ownership transfer by producing and handing over the necessary documents. Once the documents are verified and you pay the nominal transfer charge; the insurance company will issue an endorsement regarding the change of ownership.
The ownership transfer and change of name can prepare at the same time. So that it makes your transfer process stress-free. As per the rules and regulations provided by the Insurance Regulatory and Development Authority of India; in case you file an insurance claim the name and address on the registration documents and the insurance documents have to match. After paying the transfer fee of rupees 50; the buyer needs to produce and submit the below-mentioned documents for insurance policy transfer:
- New copy of the registration certificate.
- Form 29.
- Old policy document.
- No Objection Clause of the previous policyholder.
Car insurance policy transfer is important for the new buyer as he can easily recover the cost of damage.
Also Read: 7 Secrets That Your Motor Insurance Company Won’t Tell You on AutoFlipz Blog page.